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Encyclopedia

From Wikipedia, the free encyclopedia

Economic sectors
Three-sector
hypothesis
Colin Clark
Jean Fourastié
Primary sector
(raw materials)
Secondary sector
(manufacturing)
Tertiary sector
(services)
Others suggested
Quaternary sector
Quinary sector
By ownership
Public sector
Private sector
Business sector
Voluntary sector

In economics, the private sector is that part of the economy which is both run for private profit and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector; private, non-profit organizations are regarded as part of the voluntary sector.

Contents

Legal status

A variety of legal structures exist for private sector business organizations, depending on the jurisdiction in which they have their legal domicile. Individuals can conduct business without necessarily being part of any organization.

The main types of businesses in the private sector are:

  • Sole trader
  • Partnership, either limited or unlimited liability
  • Private Limited Company or LTD-limited liability, with private shares
  • Public Limited Company – shares are open to the public. Two examples are:
    • Franchise – business owner pays a corporation to use their name, receives spec for the business
    • Workers cooperative – all workers have equal pay, and make joint business decisions

In countries where the private sector is regulated or even forbidden, some types of private business continue to operate within them.

The private sector focuses on the needs of the shareholders.

Employment

The private sector employs the majority of the workforce in some countries. However, in some countries such as the People's Republic of China, the public sector employs most of the workers. [1]

Statistical organizations

See also

References

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