Organisational Structures

Private Sector Businesses

Private Sector businesses come in several different forms. The different types of Private Sector businesses are determined by their different types of ownership. The main different types of businesses are:

  • Sole Trader/Proprietor
  • Partnership
  • LTD
  • PLC

With Sole Traders there is usually one person who directly owns the business, although they can employ other people to work for them. The person running the business is the person who controls all decision making. They get to keep all of the profit the business makes (not including any wages for staff etc.). They have unlimited liability, which means that they may lose their possessions as a result of unpaid debt. An example of this type of business might be a local building firm or somebody trading on a market stall.

A partnership can be run by any number of people between 2 to 50. They will directly own the business and will most likely employ other people. They get to keep the profit the business makes and will control all decision making. They also have unlimited liability, again meaning that the owners could lose their possessions to pay off any debts. An example of this type of business might be a local shop.

An LTD is a Private Limited Company. They are "owned" by shareholders of the business. These are usually friends or family who have gained approval from the Board of Directors to invest money into the business in exchange for a share of it. The Board of Directors usually take charge of decision-making for the business. An LTD has limited liability, meaning that the shareholders can only lose the money that they have invested in the business and they will not lose any personal possessions. An example of this type of business is Direct KBB Ltd.

A PLC is a Public Limited Company. They are again "owned" by shareholders, however the shares are sold differently to an LTD's shares. A PLC's shares are sold on the stock market and can be bought by anyone. Decisions are made by the business' Board of Directors. A PLC has unlimited liability, meaning that the shareholders will only lose the money that they have invested and not their own personal possessions. Examples of PLCs are Tesco, River Island and Poundland.

Public Sector Businesses

Public sector businesses are those controlled by the Government, for example organisations like the NHS, Police Service and the Driver and Vehicle Licensing Agency. These organisations are funded by things such as income tax paid by residents of the United Kingdom. Unlike private sector businesses they are there to provide public services, are usually free at the point of use and you cannot buy shares in these businesses. These businesses are created to benefit the whole population, but are varied in their purpose. Like the private sector, there are divisions in the public sector. These include Local Authority Services and Central Government Departments.

Voluntary Sector Businesses

Voluntary Sector businesses are non-profit organisations that are usually funded by things such as donations or fundraising events. This sector is made up of a wide range of businesses. These include organisations like Unicef and Neighbourhood Watch. The businesses in this sector are usually either a registered charity or a non-charitable voluntary body. Unlike businesses in the other sectors, businesses in this sector employ a mix of paid and voluntary staff. These organisations are usually run by volunteer comittees. Examples of people who benefit from these organisations are people who live in third world countries, who are homeless and who suffer from a range of health problems. They are created to help people who, for whatever reason, are unable to help themselves.