Forms of business organization
A sole proprietorship is owned by one person, who makes all decisions and keeps all profits, but also bears unlimited personal liability for the business's debts. A partnership is owned by two or more people who share capital, management, profits, and liability, allowing more resources and shared expertise than a sole proprietorship, but with the risk of disagreements between partners. A limited liability company is owned by shareholders, who are only liable up to the amount they've invested (limited liability), making it easier to raise large amounts of capital, though it involves more regulation and reporting requirements.
Example 1: Explain one advantage a limited liability company has over a sole proprietorship when it comes to raising capital.
A limited liability company can raise capital by selling shares to many investors, who are attracted by the protection of limited liability (they can only lose what they invested) -- giving access to far more potential capital than a sole proprietorship, which typically relies only on the owner's personal funds and loans.
Public enterprises and privatization
A public enterprise is a business owned and run by the government, often in sectors seen as essential (like utilities) or requiring large capital investment. Privatization is the process of transferring ownership of such enterprises to private investors, often pursued to improve efficiency, reduce government spending burdens, and encourage competition -- though it can also raise concerns about access and pricing for essential services once profit becomes the primary motive.