Posts Tagged ‘business sectors’
Private sector plays major role in capitalist or market economic system. Private investment, management and control dominate in private sector. The forms of business firms in private sector include partnership firms, sole proprietorship, private limited companies and public limited companies. The sole proprietor or sole trader is an individual who invests, owns, manages and controls the business. The individual invests his own and or borrowed capital, manages and business, bears all the risks alone, enjoys all the profits and suffers from all the losses. Thus the sole proprietor is the sole owner, manager, controller, strategist, policy maker, risk-bearer, financier all rolled in to one. The advantages of sole proprietorship form of business include ease facility of formation, quick decision making prompt, action, establishment of maximum personal contact with customers, confidentiality of business decisions, flexibility, lower costs of management etc.
The stage of economic development and the level of economic development and the level of economic activity determine the suitability of a form of business firm. In fact, a particular form of business firm play a dominant role in the economic activities at a particular stage of economic development. In other words, all forms of business firms play their due roles in the economic activities. The forms of business firms are mainly divided in to three categories like private sector, public sector and cooperative sector. When it comes to private sector, there are three forms like sole proprietorship, partnership, and joint stock companies. The two forms of public sector are departmental undertakings and statutory corporations. All the co-operative societies are comes under co-operative sector. The total business activity in the country is carried out in three sectors viz., private sector, public sector and co-operative sector.