Purpose, Function and Legal Structure of Business

Elements

Public sector

Private sector

Voluntary sector

Meaning

Those organizations which are owned, managed and operated by government. In this type of organization works towards the upliftment and welfare of the people living in the nation.

Private sector are those businesses which are owned and managed by individual or groups. All the decisions for the businesses are taken by the owner, director or CEO of the company. There is no role of government in it.

In society this type of businesses is mainly working for the upliftment of the community and their people. They help people in all possible way to solve their problems.

Purpose

The purpose of this type of enterprise is not to generate huge revenue instead to work for their welfare. But in order to run the public sector business smoothly in the open market place they charge nominal fees from the people.

Private sector main purpose is to maximize huge profit as compare to rivalry. This type of business mainly focusses on meeting the needs and demands of the customers so that sales ratio can be raised and revenue and generated to a large extent.

This types of business are non-profit firm whose purpose is to serve better for the society people and to raise their living standards.

Examples

In United Kingdom Network Rail is the best example of public sector. They are held accountable to look after the maintenance of the Great Britain railway network.

Hennes and Mauritz is a multinational clothing retail company. It is widely well known for fashionable clothing which it offers to their targeted customers across the globe. It is one of the private sector firm in UK

In United Kingdom Cancer Research UK is an awareness charity who is well known for decreasing the number of death ratio caused by cancer by making people aware about its symptoms.

Legal structures

The legal structure of public sector are:

Central government: With the help of income tax central government is able to collect huge funds from general public (Geissdoerfer and Evans, 2018).

Local government:

Through council taxes local government are able to accumulate huge cash amount.

State government: In this case they hire or own some of the businesses which are not controlled by central government or they interfere in it.

The legal structure of private sector are as follows:

Sole proprietorship: This type of businesses are owned and operated by individual on small scale like, taxi drivers, grocery stores, Hair cut salon etc.

Partnership: In this case with mutual understanding contract is signed in which ratio of profit and loss is mentioned.

Limited company: This is a legal structure which limits the liabilities of the firm's members in relation to their contribution.

The legal structure of voluntary sector are as follows:

Trust: It provide services to the people based on the trust and faith of the people though it is not a legal entity.

Unincorporated Association: Here, group of people come together willingly to form clubs and society in order to meet the particular purpose.