This document defines and provides examples of the private, public, and voluntary sectors. The private sector is made up of businesses aimed at making profits, such as sole traders and partnerships. The public sector is controlled by the government and provides public services, like the NHS and state schools. The voluntary sector provides community services without profit, obtaining grants and donations, and includes charities like Oxfam that address issues like poverty.

1. Unit 207:
Understanding
the Business
Environment
Digital Project
1.1
1.2
1.3

2. What is the private sector? (AC
1.1)
 A Private Sector is owned by an individual or groups of individuals with
the main aim being to make profit for the shareholders and owners. One
example of the type of businesses that operate in the private sector is
sole traders. A sole trader runs their own business as an individual and
keeps all the business’s profits after they have paid tax on them. They are
personally responsible for any losses the business makes.
 Another example is Partnership. In a business partnership, the partners
share responsibility for their business. This includes sharing the
business’s profits and each partner pays tax on their share of profits.
 The third example is Private and public limited companies. Limited
companies are an organisation which is set up to run your own business.
It is responsible in its own right for everything it does. Its finances are
separate to the person’s personal finances. After it pays Corporation Tax,
any profit made is owned by the company. The company can then share
its profits.

3. What is the public sector?
(AC 1.2)
 Public sector organisations are controlled by the government.
This means they are state owned and therefore owned by all
members of the public. It does not aim to make profit but the
main aim is to provide a public service.
 One example would be the NHS who provide healthcare to all,
regardless of their wealth and are funded by the government.
 State school are also funded by the government to provide free
education.
 National Parks are protected by the state for the enjoyment of
the general public, also funded by the government.
 Funding in this government sector is raised through Lottery
funding, taxes, Grants and loans.

4. What is the voluntary sector? (AC
1.3)
 The voluntary sector provides a service to the community without making
a profit. They receive grants and aid from Governing bodies and lottery
funds. They can also run voluntary fund raiser activities.
 An example is Oxfam. This international confederation finds solutions to
poverty and what it considers injustice around the world. There are many
charity shops in order to fundraise as well as having a range of
fundraising channels.
 The Big Issue is a street newspaper sold by homeless individuals in order
to offer the homeless the opportunity to earn a legitimate income.
 The Princes Trust is a charity in the UK which aims to help young people
by running training programmes, providing mentoring support and offering
financial grants to disadvantaged young people. They obtain money from
two sources; from charitable activities and raising voluntary income.