Capital (money, buildings, machinery, etc…) is needed to set up a company.
Capital is provide by private individuals (private companies), or the State (State companies).
Private companies can be individual (one person provides the capital) or collective (many people provide the capital). In this case the company is a cooperative or a public limited company or corporation.
Public
The owner of the company is the Government. Usually the employees are ‘public servants’. They can work in public hospitals, public schools, or in administration.
Private
- Individually owned. A company that belongs to a single individual. This owner takes all the decisions, profits and losses.
- Cooperative. A company formed by a group of people united for a common purpose, which could be economic, cultural or social. Membership is voluntary and free to all, and each member pays the same amount to join. When making decisions, the rule is ‘one member, one vote’.
- Public limited company or corporation (PLC). The initial capital of this company is distributed in ‘shares’. Major decisions are voted on a shareholder (or stockholders’) meetings, and the stockholders who own more shares have more votes. The profits are distributed according to the number of shares and if there are losses, the shareholders only lose the money that they spent when they bought the shares.