Classification Of Business Sectors

The main types of business organisation in the private sector in the UK are - sole traders, partnerships, companies and franchises.

The sole trader is the most common form of business ownership and is found in a wide range of activities (e.g. window cleaning, plumbing, electrical work, busking).

In the sole traders operate in the construction industry, a further 20in retailing, and about 10in finance, and 10in catering. No complicated paperwork is required to set up a sole trader business.

Decisions can be made quickly and close contact can be kept with

customers and employees. All profits go to the sole trader, who also has the satisfaction of building up his or her own business. But there are disadvantages.

As a sole trader you have to make all the decisions yourself, and you may have to work long hours (what do you do if you are ill or want a holiday?) You do not have limited liability, and you have to provide all the finance yourself. As a sole trader you need to be a jack-of-all-trades, and just because you are a good hairdresser does not necessarily mean you have a head for business!

The partnership An ordinary partnership can have between two and twenty partners. However, the Partnership Act of 2002 has made it legal for some forms of partnership e.g. big accountancy firms to have more partners who also enjoy limited liability.

Reference: -

http://businesscasestudies.co.uk/business-theory/strategy/public-and-private-sectors.html