A private limited company aims to maximize profits and expand the business, with ownership held by shareholders who are usually friends and family. Control lies with shareholders and directors, and finance comes from shareholder investment and retained profits. A public sector organization provides services not addressed by the private sector, with ownership by taxpayers and control by elected councillors or government-appointed boards. It is financed mainly through government funding and income from services.

1. Learning Intention
Types of Organisation
Revision
By the end of this lesson you will be able to:
identify the differing types of ownership, control and finance
within organisation
understand the differing objectives of organisation
construct a suitable answer to a compare question on the
above topics

2. Challenge Question
Compare the objectives of a private limited
company when compared to a public sector
organisation in terms of ownership, control
and finance.
(3)

3. Sector
PrivatePublic
Voluntary

4. Sector
• Public Corporation - public
• Partnership - private
• Charity - voluntary
• Sole Trader - private
• Private Limited Company - private
• Local Authority - public
• Voluntary Organisation - voluntary
• Public Limited Company - private

5. Example
BBC
NHS
Dental
Practice
Oxfam
Cancer Research
Local Builder
Arnold Clark Ltd
Inverclyde
Council
Boys Brigade
Girls Brigade
RBS plc
Barr plc

6. Example
• Public Corporation – BBC, NHS
• Partnership – Dental Practice
• Charity – Oxfam, Cancer Research
• Sole Trader – Local builder
• Private Limited Company – Arnold Clark Ltd
• Local Authority – Inverclyde Council
• Voluntary Organisation – Boys Brigade, Girls
Brigade
• Public Limited Company – RBS plc, Barr plc

7. ObjectivesTo provide a service
Not addressed by
private sector
To make best use
of funds
To raise funds
To raise awareness
of cause
To eliminate
social problem
To survive
To maximize profit
To maximize profits
To expand
To build a good reputation
To maximize profits
To expand company
To increase reputation
To extend product range
To increase membership
To promote sport/activity
To meet needs of members
To survive/satisficing
To maximize profit
To growth the business
Provide best service to public
To cover all costs
To stay within budget limits

8. Objectives
• Public Corporation - Provide best service to public, To cover all
costs, To stay within budget limits
• Partnership - To survive, To maximize profit
• Charity - To raise funds, To raise awareness of cause, To eliminate
social problem
• Sole Trader - To survive/satisficing, To maximize profit, To growth
the business
• Private Limited Company - To maximize profits, To expand, To build
a good reputation
• Local Authority - To provide a service not addressed by private
sector, To make best use of funds
• Voluntary Organisation - To increase membership, To promote
sport/activity, To meet needs of members
• Public Limited Company - To maximize profits, To expand company,
To increase reputation, To extend product range

9. Ownership
Shareholders Members
Government
Tax PayersShareholders who
are family and
friends (2 – 50)
Partners
(2 – 20)
Owner
Wholly owned
by government
Members

10. Ownership
• Public Corporation – wholly owned by
government
• Partnership – partners (2-20)
• Charity – members
• Sole Trader – owner
• Private Limited Company – shareholders who
are family and friends
• Local Authority – government/tax payers
• Voluntary Organisation - members
• Public Limited Company - shareholders

11. Control
Board of Directors/
Management
Owner
Committee Managers
Councillors
Appointed Directors
of Service
Partners
Managers
Committee
Board of Governors/
Management Trustees
Shareholders
Directors
Managers

12. Control
• Public Corporation – Board of Governors/Management
Trustees
• Partnership – Partners, managers
• Charity – Committee Members
• Sole Trader – Owner
• Private Limited Company – Shareholders, Directors,
Managers
• Local Authority – Councillors, Appointed Head of Service
• Voluntary Organisation – Committee
• Public Limited Company – Board of
Directors/Management

13. FinanceGovernment funding
Income from services
Raising Funds
Grants
Shareholder investment
Retained profits
Bank loans/overdraftsFund raising
Membership fees
Grants
Savings
Borrowing
Set-up grants
Banks
Share issue to general public
Debenture issue
Retained profits
Bank loans
Local taxes
Government funding
Capital from new partners
Savings
Loans

14. Finance
• Public Corporation – Government Funding, Income from
Services
• Partnership – Capital from new partners, savings, loans
• Charity – raising funds, grants
• Sole Trader – own savings, borrowings, set-up grants,
bank
• Private Limited Company – shareholders investment,
retained profits, bank loans/overdraft
• Local Authority – local taxes, central government funding
• Voluntary Organisation – fundraising, grants,
memberships fees
• Public Limited Company - Share issue to general public,
Debenture issue, Retained profits, Bank loans

15. Challenge Question
Compare the objectives of a private limited
company when compared to a public sector
organisation in terms of ownership, control
and finance.
(3)