Before entering business a new business man must have some understanding with types of companies. After all in which type of company he is interested to initiate his business. The differentiation between public and private sectors’ organizations is very significant in order to know their different features, aims and objectives, and scope of work.
The Public Sector Public sector’s organizations are budgeted and run by state. They are often called as state organizations. The primary objective of these organizations is to serve the public not to earn profit. Finances are offered freely for the uplift of society. In other words, they involve in social welfare. Organizations of public sector include educational institutes, health services, security providing organizations, national defence, financing etc.
The Private Sector
Private sector encompasses organizations with primary objective of profit earning and further divided in to two kinds:
Non-Limited CompaniesNon-limited companies do not involve complicated business concepts. There are few formalities found in this type of company, which can be set at the start of business. These formalities are opted by the selection of owner, like, be either a sole trader or start business with partners on partnership basis and the owner will be personally liable for all of the debts if the business fails. Non-limited companies are free of legal bounding. There is no legal requirement for non-limited companies to make any of their financial information public. Non-limited companies are commonly termed as "businesses".
Limited Companies Limited companies can be either privately owned when they are referred to as Limited (often abbreviated to Ltd) or publicly owned. Some publicly owned can sell shares to members of the public on the stock exchange, unlike Ltd's that cannot do in the same way. The liability for both limited and publicly owned companies is restricted. This means that incase of failure of any company, the liability of the company's shareholders is limited to the value of the shares and not to the personal funds or assets of the business owners. Or, in the case of companies limited by guarantee in which no share capital is involved, the liability of its members is limited up to a specific level that their members wish to contribute to the assets of a company in the event of it being wound up. Please note here that for limited companies, generally used term is “Company” so people automatically understand the nature of company existence. All Limited companies are legally required to submit Company Accounts and Annual Returns every year. These documents are filed at an executive agency of the Department of Trade and Industry (DTI) called Companies House. This information is available to the public. A limited company has similar rights to a person; for example it can buy assets, own property, and it can sue or be sued independently of its directors. It can have detrimental information registered against it too.
No Comments Yet.
You must be logged in to leave a Comment.