SQA National 5 Business Management 2025 – 400 Free Practice Questions to Pass the Exam

The Third Sector is characterized primarily by its not-for-profit objectives. Organizations within this sector, such as charities, non-profits, and voluntary organizations, are established to achieve specific social, cultural, or environmental goals rather than to generate profit for owners or shareholders. These organizations often rely on donations, grants, and volunteer support rather than traditional profit-driven revenue streams. The focus on serving the community or a particular cause distinguishes the Third Sector from private enterprises, which prioritize financial gain.

In contrast, options that refer to profit generation for shareholders, government ownership, and limited liability for owners are indicative of either the private sector or the public sector. The private sector primarily aims to generate profit for its stakeholders, while government ownership aligns with entities in the public sector that serve government interests, often funded by taxpayer money. Limited liability pertains to the structure of companies where owners are financially protected against the company's debts, which is more characteristic of the private sector rather than the altruistic mission of Third Sector organizations.