MIXED ECONOMY

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MIXED ECONOMY
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A market economy primarily based on private
enterprise where the government, however, plays
an important role in regulating the system as a
whole by its choices of economic policy and by
providing some essential services.
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Although private sector firms predominate, both
private and public enterprises are important for
the economic and social development of the
country.
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The most important types of private business
units in the United Kingdom are
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sole proprietors or sole trader
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partnerships
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limited companies
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cooperative societies
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A sole proprietor -or sole trader-
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is a person who owns and runs a business for
himself
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This type of business organization still
represents a large number of concerns in farming
and retail trade.
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It has the following main characteristics
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a single person -the sole proprietor owns the
business and therefore bears all the risks and
any losses
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he also receives all the profits
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he provides all the finance which forms the
capital of the business
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he has full control of the enterprise
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Businesses of this kind are often rather small at
the start, but many subsequently develop into big
firms.
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A partnership
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is an association of individuals engaged in
business.
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The minimum number of people is obviously two,
and the maximum number is generally limited to
twenty.
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Compared to sole traders
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ADVANTAGES

• More owners can provide more finance
• risks are shared among partners

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DISADVANTAGES

• profits are shared among partners
• no single partner has full control or
  policy-making powers

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When a partnership is formed, a document called a
partnership agreement or articles of
partnership is normally drawn up.
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It contains all the necessary information about
the partnership.
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for example

• The name and address of the business
• The names and addresses of the partners
• The quantity of capital which each partner is to
  provide
• The way in which profits and losses will be shared

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Two types of partnership can be distinguished

• ordinary (or general) partnership
• limited partnership

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An ordinary partnership

• Is one in which all partners have unlimited
  liability and a creditor may seize their personal
  property to obtain payment of debts the
  partnership owes him

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In a limited partnership

• On the contrary, along with one or more general
  partners there are one or more limited partners.

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• General partner
• has unlimited liability (as explained above)

• Limited partner
• is only liable for the partnerships debts up to
  the value of the money they have put into the
  business

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Limited companies
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Is a business enterprise that has a separate
legal existence apart from its shareholders.
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Shareholders the investors who have bought
shares in the company and are its owners
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Other important features of a company

• Shareholders control the business on a majority
  vote basis
• They elect the directors, who are responsible for
  the day-to-day running of the company
• Profits are distributed as dividends on the basis
  of the shares held
• Shareholders have limited liability

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Cooperative societies
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Are non-profit making associations of persons,
who are at the same time both members and
customers of the cooperative
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And whose aim is to economize by producing,
buying or selling goods in common, returning the
profits to members.
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Cooperatives are not confined to retail trade,
they also cooperate in

• Wholesale trade
• Manufacturing
• Farming
• Provision of direct services