Presentation of Management Financial Services

Topic : Private Sector

Prepared By Jethva Anita Vakriya Hetal Boghani Akta

Content
Types of Organisations Profit non-profit and non-governmental Sole Trader/Proprietors

Private Sector and Public Sector

Meaning of Private Sector

The private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups. Usually as a means of enterprise for profit, and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector, private, non-profit organizations are regarded as part of the voluntary sector

Top 10 Private Sector Companies (Rank-wise List)

Reliance Industries Limited Tata Consultancy Services (TCS) Infosys Technologies Ltd Wipro Limited Bharti Tele-Ventures Limited ITC Limited Hindustan Lever Limited ICICI Bank Limited Housing Development Finance Corp. Ltd. TATA Steel Limited

The Private and Public Sectors of the Economy

The Private Sector comprises businesses owned and controlled by individuals or groups of individuals. In every country, most business activity is in the private sector. The Public Sector comprises Organisations accountable to and controlled by central or local government. These usually include: Health and education services THE ECONOMY Defense Law and order Some strategic industries.
Private Sector Public Sector

The Private Sector Legal Structure

Private Sector Businesses

Sole Trader

Partnership

Limited Companies

Cooperatives

Private LTD

Public LTD

The Sole Trader/Proprietor

This is the most common form of business organization. One person provides the finances and in return, has full control of the business and is able to keep all the profits.

The Sole Trader/Proprietor

Advantages

Disadvantages
set up-no legal

Easy to formalities.

Unlimited liability all of the owners a assets are potentially at risk. Often faces intense competition from bigger firms, for example, food retailing. Owner is unable to specialize in areas of the business that are most interesting it is responsible for all aspects of management. Difficult to raise additional capital.

Owner has complete control not answerable to anybody else. Owner keeps all profits. Able to choose times and patterns of working. Able to establish close personal relationships with staff (if any are employed) and customers. The business can be based on the interest and skills of the owner rather than working as an employee for a larger business.

Partnership

Partnerships are agreements between two or more people carry on a business together, usually with a view of making a profit. The Deed Of partnership establishes the rights and privileges of the partners. This document includes issues such as voting rights, distribution of profits, The management role of each partner and who has the authority to sign contracts.

Partnership
Advantages

Disadvantages

Partners may specialize in different areas of business management. Shared decision making. Additional capital injected by each partner.

Profits are shared. There is, as with sole traders, no continuity and the partnership will have to be reformed in the event of the death of one partner. Al partners are bound by the decision of any one of them.

Business losses shared between the partners.

Greater privacy and fewer legal formalities that corporate Organizations (companies)

Not possible to raise capital from selling shares.

A sole trader, taking on partners will loose independence of decision making.

The Private Sector Characteristics

Tend to be relatively small companies. Their business name ends in Limited or Ltd. Shares can only be transferred privately and all shareholders must agree to the transfer. Private Sector Companies are often family businesses owned by members of the family or close friends. The directors of these companies tend to be shareholders and are involved in the running of the business.

Exiting the Stock Market

Sometimes a business operating as a Public Limited Company is taken back into private ownership.

Factors Affecting the choice of Organisations

Age: Many businesses change their legal status as they become older. The Need for finance: A change in legal status may be forced on the business. Size: The size of a business operation is likely to affect its legal status. Limited Liability: Owners can protect their own personal financial position if the business is a Limited Liability company. Degree of control: Owners may consider retaining control of the business as important. The Nature of the Business: The type of business activity may influence the choice of legal status.