Essay MR J LIN

Submitted By lchn95
Words: 1534
Pages: 7

P1 – Describe the type of business, purpose and ownership of two contrasting businesses
In this piece of work, I will briefly introduce what the range of business, purposes, and ownership means. Also I will then identify the type of business, purpose and ownership of the two businesses - Ministry of Defence and Gallagher Group.
The type of business can be identified by sector and range of business activities.
The sector of business activities
The business sector is actually what the business work on; it includes the following three sectors:
Primary sector: The business in Primary sector produces and obtains row materials or natural resources directly. It includes farming, fishing, forestry, mining, and extraction of oil and gas. It’s the lowest level of business sector, and it makes the lowest profit.
Secondary sector: The business in Secondary sector processes raw materials into tangible products or manufacture complete products; it can be car manufacture or food production and so on.
Tertiary sector: the business in tertiary sector sells products or provides services, such as supermarket, cinema and leisure Centre. Tertiary sector is the highest level of business sector, and it makes the highest profit as well.

The range of business activities
The range of business activities tells how big the business is and where it located. It includes local, national, international and global. Local business means it only has its business on one area, such as Happy Fish Bar in Margate. National business means its business has expanded across the country, such as JD Sports. International business means its business has expanded to other countries, and conducted business between many countries, such as TESCO. The global business means its business has expanded around the world, it sells products or provides services everywhere in the world, Coca-Cola is the most typical and successful example of global business.
The ownership sector of business
The ownership of business can be divided into private sector, public sector and voluntary sector. Normally, private sector business is owned by individuals or shareholders. The purpose of this sector business, profit is often the major driving force of business. Public sector business is owned by government; it has made profit, but often has wider social service aims than profits. Voluntary sector business is supervised by trustees, it doesn’t make any profit, and usually it is set up to provide a service to the public.
The type of ownership
There are many different types of business ownership, such as Sole Trader, Partnership, Private limited company, Public limited company, Government department and so on. Main implications of different types of ownership on business are extent of liability, and limitations to operation for public and charitable organizations.
Sole Trader: it’s the smallest type of company which owned by one person, and this person will be responsible for everything of this business.
Advantages:
i. Owner retains all profit of business ii. Owner maintains full control of business iii. Owner can make decisions quickly
Disadvantages:
i. Owner takes the all liability of business ii. Owner cant receive other ideas iii. It’s difficult to raise finance to fund business

Partnership: this type of business is owned by at least two people, and the people are jointly responsible for running the business.
Advantages:
i. Easy to raise more money into business ii. More people and more ideas to solve business problem iii. Partners can share the responsibility of the running of the business.
Disadvantages:
i. Disagreement between partners might harm business and their relationship ii. Profits must be shared with others iii. Partners are liable without limit for all debts

Private limited company (Ltd): the owner of the company is called shareholder, there must be at least two shareholders. The shareholders can sell their shares by agreement of other…