Why do businesses exist?
- Mainly to make a profit
- Provide a good service (Mostly companies in the public sector)
What are stakeholders?
- Stakeholders are any people or groups of people who have a interest in the business, they can often be outside the business itself.
Why are stakeholders important?
- The main reason is that the stakeholders or the shareholders can sack the directors and sell the business to someone else.
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Public and Private Sectors
The Public Sector:
- The public sector includes everything that is owned by the government.
- This is things like the army, the police force and most schools and hospitals.
- Public means that they are owned by the government for the benefit for everyone.
The Private Sector:
- The private sector contains all the businesses owned by private individuals.
- Almost all businesses are in the private sector, This includes businesses such as, Argos, KFC, Nike, Adidas and Ford etc.
- Private means that these businesses are run for the benefit of the people who own them. (To make a profit)
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Limited And Unlimited Liability
- The owner of a business does not risk losing personal possessions in order to pay off the debts of the business. This includes incorporated businesses which are businesses that have a separate legal entity.
- The owners personal assets are at risk because he may have to sell them in order to pay off the company's debts. This is where the owners is at risk of losing more than he has invested.
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