Private and Public Sector Organizations

Private sector organizations are owned and controlled by private individuals, rather than
government. Their aim is usually to make a profit. They can be very small, from a one-person
business, to a huge multi-national like Nike or GE.
Public sector organizations are under the control and ownership of the government.
They provide services that are not profitable.
E.g. post offices in small villages. Some are
essential to society, such as armed forces and fire service.
Other Italian examples are RAI or Poste Italia.

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Private Sector - Sole Traders

Sole traders are the smallest type of business. They

can be identified by the following features:
Owned & controlled by one person.
They do not require a lot of money to set up.
Money is usually provided by the owner.
They are easy to set up.
They are Unincorporated
This means that legally the owner and the business are the same
They have Unlimited Liability
Examples include:
Hairdressing Retailing Window
Cleaning

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What Does Unlimited Liability Mean?

Liability is important when deciding what type of

business to set up.
If a business has Unlimited Liability then the owner:
Is responsible for ALL debts.
Must pay off these debts using their own money if the
business cannot afford to pay them.
May have to sell their own house/car in order to pay these
debts.

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Should We Be a Sole Trader?

Yes!
1 Easy to set up
2 Usually small, so less money
is needed
3 Owner can make all of the
decisions
4 Owners can keep all the
5 profits
Business accounts can be
kept private
6 Can provide specialist
services
Can respond to the need of
7 7 Owners must work long hours
the customers
No!
1 Unlimited liability
2 Money can be difficult to
obtain
3 Costs are usually higher
4 Prices are usually higher
5 Holidays may be difficult to
take
6 Ill health may close the
business
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Partnerships
Partnerships are usually small businesses.
They tend to be a little larger than sole traders.
They can be identified by the following features:
Two or more people running a business which aims to make a profit.
The maximum number of partners is usually 20.
Money is usually provided by the partners. 
They are easy to set up but may have a “Deed of Partnership” 
They are Unincorporated. 
They have Unlimited Liability (except Sleeping Partners)
 Examples include: 
In Italy, called an
S.N.C or S.A.S.

Accountants Estate
Agents

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What is a Sleeping Partner?

A silent or sleeping partner is someone

who has invested money into the
partnership, but does not play an active
part in the day to day running of the
business.

This means that they have LIMITED

LIABILITY because they do not control the
debts that the business may run up.

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What is a Deed of Partnership?

A Deed of Partnership is a legal

document that states the rules of the
business.
It should state the following information:

 Who the partners are

 How much money each partner has put into
the business
 How profits should be shared out
 How many votes each partner has in any
meetings
 The procedures for partners leaving or
joining the business

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Should We Be a Partnership?
Yes!
1 Easy to set up – but a Deed
of Partnership is advisable
2 Usually small, so less money
is needed
3 Responsibilities can be
shared
4 Decisions can be shared
5
Accounts can be kept private
6 Money comes from partners
No!
1 Unlimited liability (except
sleeping partners
2 Money can be difficult to obtain
3 Legal costs of drawing up a
Deed of Partnership
4 Possible arguments
5 Limit on the number of partners
6 Problems if partners leave
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