Gözde Torun

1.2. Types of Organizations. Summary

  • Private vs. Public sectors
    • Private Sector
      • The goal is to make profit owned, financed and run by private individuals or entities
    • Public Sector
      • Goods and services provided by the government or local authority may be free or sometimes with a small fee
      • e.g. public hospitals, museums, etc.
  • Types of for-profit/commercial organizations
    • Sole trader
      • A business that is completely owned and controlled by just one person simplest form of business owned by a single person who assumes all profits and liabilitiesAdvantagesLittle legal requirements for setup all the income goes to one man
        • restrictions and easy decision-making
        Disadvantages
        • All the income tax is shouldered by one man with unlimited liability (owner is the same legal entity as the business) and all the debt incurred by the business is put on the ownerPartnership Company ran by two or more individuals who form a partnership each person contributes money and resources, as well as sharing the responsibilities of managing a business.
        Turns into a corporation if there > 15 partners and will pay corporate tax.Has a deed of partnership stating the responsibility of each partnerInvolves presence of “silent” or “sleeping” partners, who do not make decisions, merely giving money to the business and earning profitAdvantages
        • Liability is spread around range of skills higher capital
        Disadvantages
        • Unlimited liability despite being spread out between partners lower decision-making private limited company (LTD)Shareholders are limited to family, friends, and business partners shares
        cannot be sold to the public type of incorporation
        • Owner and company are separate entities, results in limited liability
        Registered at the Securities and Exchange Commission (SEC)Advantages
        • Limited liability – when the company is sued or incurs losses, all a shareholder will lose is his stock in the business .Higher capital, higher capacity for expansion
        Disadvantages
        • More restrictionsCorporate taxes (higher)
    • Public limited company (PLC)
      • A company whose shares are listed on a stock exchange and can be freely bought and sold by anyone required by law to publish their complete and true financial position type of incorporation must conduct shareholders’ meetings an LTD can convert to PLC by offering stock market flotation or an initial public offering (IPO)Advantages
        • More capital raised from selling stock limited liabilityContinuity after death, freely transferableHigher capacity for expansion
      • Disadvantages
        • Possibility of a hostile take-over through shares, control can change unexpectedly and be lost by the original owner
        • Much more restrictions
        • Corporate tax
  • Types of for-profit social enterprises
    • Cooperatives
      • Organizations that are jointly owned and run by its members who share in profits and benefits advantages
        • Shareholders must be help run the organization, and work is more spread out equal voting rights/power among all shareholdersDisadvantagesDecision-making may be more time-consuming or involve more conflicts and profit for each shareholder as it is spread among many members
      Microfinance providers
      • Microfinance – loan service offered to individuals or groups with no access to more conventional banking services (unemployed, low-income individuals, etc.)
    • Public-Private Partnerships (PPP)
      • Public corporations are sold off or transferred to the private sector advantages
        • Incentivized to be more efficient and productive government can focus on other projects and infrastructureEnjoy the skills and talents of the private sector (can lead to increased efficiency and productivity)
      • Disadvantages
        • Services provided would be more expensive prices goes up, government would have to subsidize (increase in taxes)
        • Aim of profit may lead to cost cutting, lower quality, higher prices
  • Types of non-profit social enterprises
    • Non-profit businesses
      • Run not for profit but to benefit the public (especially the marginalized)Operational (objective or purpose) or advocacy (promote or defend a cause)
      Non-profit organizations (NPOs) vs. non-government organizations (NGOs)
      • NPOs
        • Does not divide its funds between owners aim is to raise funds and use it for their beneficiaries.g. service organizations or charities, Bantay Bata, PGH, PCSO
        NGOs
        • Exists in the private sector NGOs participate in humanitarian projects, education projects, etc.e.g. WWF, UNESCO, Red Cross
      Charities
      • A non-profit organization that is exempt from taxesDeploys its resources for charitable purposesMay raise funds to reduce poverty or to reduce environmental problems.e.g. Caritas Manila, Pondo ng Pinoy
    • Pressure Groups
      • Organized groups that do not run for election
      • Advocate certain interests such as environment, sexuality, religion, rights, etc.
      • Seeks to manipulate the public or private sector for certain causes.
      • e.g. PETA, Greenpeace, Church, LGBT

Yorum bırakın