1.2 - Types of Business Entities (Flashcards)

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Private sector

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Part of the economy run by private individuals and businesses, primarily aiming to maximize profits.

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Public sector

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Part of the economy controlled by the government aiming to maximize social welfare.

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Sole trader

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Self-employed person with unlimited liability.

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Partnership

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Business entity owned by 2-20 partners who share the responsibility of running the business.

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Privately held company

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Business owned by shareholders, not publicly traded.

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Publicly held company

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Incorporated business allowing public share trading.

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Limited liability

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is a restriction on the amount of money that owners of a company can lose if the business goes bankrupt, i.e. shareholders cannot lose more than the amount they invested in the company.

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Social enterprises

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Businesses with social objectives, for-profit or non-profit.

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Cooperatives

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For-profit social enterprises owned by members.

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Non-governmental organization (NGO)

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Not-for-profit social enterprises benefiting others.