1.2 Types of Organisations
Private Sector Organisations
● Sole Trader
○ Owned and run by one person.
○ Advantages: full control, keeps all profits, simple to set up.
○ Disadvantages: unlimited liability, limited finance, heavy workload.
● Partnership
○ Owned by 2–20 people.
○ Advantages: shared responsibility, more capital, varied expertise.
○ Disadvantages: unlimited liability, potential conflicts, profit sharing.
● Private Limited Company (Ltd)
○ Shares owned privately, not traded publicly.
○ Advantages: limited liability, separate legal identity, easier to raise finance.
○ Disadvantages: more regulations, less secrecy, profits shared as dividends.
● Public Limited Company (PLC)
○ Shares traded on stock exchange.
○ Advantages: large capital raised, limited liability, prestige.
○ Disadvantages: risk of takeover, loss of control, costly compliance.
Public Sector Organisations
● Owned and controlled by the government.
● Provide essential goods/services not profitable for private firms (e.g. healthcare,
education, defence).
● Aim: social welfare rather than profit.
Non-Profit Social Enterprises
● Non-Governmental Organisations (NGOs)
○ Non-profit, voluntary groups promoting social, environmental, or humanitarian
causes.
● Charities
○ Raise funds for specific causes.
○ Advantages: tax exemptions, public trust.
○ Disadvantages: reliance on donations, strict regulations.
Other Forms
● Cooperatives
○ Owned and run by members (workers or consumers).
○ Aim: mutual benefit rather than profit maximisation.
Private Sector Organisations
● Sole Trader
○ Owned and run by one person.
○ Advantages: full control, keeps all profits, simple to set up.
○ Disadvantages: unlimited liability, limited finance, heavy workload.
● Partnership
○ Owned by 2–20 people.
○ Advantages: shared responsibility, more capital, varied expertise.
○ Disadvantages: unlimited liability, potential conflicts, profit sharing.
● Private Limited Company (Ltd)
○ Shares owned privately, not traded publicly.
○ Advantages: limited liability, separate legal identity, easier to raise finance.
○ Disadvantages: more regulations, less secrecy, profits shared as dividends.
● Public Limited Company (PLC)
○ Shares traded on stock exchange.
○ Advantages: large capital raised, limited liability, prestige.
○ Disadvantages: risk of takeover, loss of control, costly compliance.
Public Sector Organisations
● Owned and controlled by the government.
● Provide essential goods/services not profitable for private firms (e.g. healthcare,
education, defence).
● Aim: social welfare rather than profit.
Non-Profit Social Enterprises
● Non-Governmental Organisations (NGOs)
○ Non-profit, voluntary groups promoting social, environmental, or humanitarian
causes.
● Charities
○ Raise funds for specific causes.
○ Advantages: tax exemptions, public trust.
○ Disadvantages: reliance on donations, strict regulations.
Other Forms
● Cooperatives
○ Owned and run by members (workers or consumers).
○ Aim: mutual benefit rather than profit maximisation.
