The private sector is a sector that is run by individuals and not controlled by government entities. Profit-making is the primary motive of most pirate sector companies.
Simply put, private companies have no government interference and operate independently with the objective of profit maximization and customer satisfaction. Private sector companies can be created by forming new companies or privatizing a public sector company.
The private sector influences the country's economic development and forms a big part of the overall economy.
Types of Private Sector Businesses
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Sole Proprietorships: These are businesses operated by only one person and usually funded using the proprietor’s personal funds.
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Partnership: Partnership businesses are businesses owned and operated by two or more individuals as partners in the business’s profits and losses.
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Small and Medium Enterprises: SMEs are enterprises that fall have an annual turnover of 250 crores or less.
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Multinational Corporations: MNCs are companies that have operations in more than one country. MNCs are considered separate legal entity from their owners. Such companies are owned by the shareholders who elect a board of directors to look after the operations of the company.
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Trade Associations: Professional and trade associations are the associations that serve a particular industry. For example, the FICCI is an association that deals in matters of trade.
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Trade Unions: A trade union serves and provides resources to the people belonging to a specific field or industry. For example, the lawyer’s union looks after the rights of lawyers. Similarly, the doctor’s union is engaged in activities to support the rights of doctors.