Business organizations in the private sector differ from one another in terms of ownership structure and control, the purpose of existence, how they raise finance, how they are managed and who manages them, their size and how the profits are distributed or losses covered.
Businesses in the private sector are divided into three main types depending on profit orientation:
1. For-profit commercial organizations
a. Unincorporated businesses: Sole trader, Partnership
b. Incorporated businesses: Private limited company, Public limited company, Holding company
2. For-profit social organizations
a. Cooperative
b. Microfinance provider
3. Non-profit social organizations
a. Non-governmental organization (NGO)
b. Charity
For profit commercial organizations are businesses that operate in the private sector aiming to make and maximize profit. Business organizations can only survive in the long-term, if they are profitable.
The main types of profit-based commercial organizations are sole traders, partnerships, limited liability companies (private limited company and…
