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    Types of Business Ownership

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    Types of Business Ownership

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    types of business ownership

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    30 views5 pages

    Types of Business Ownership

    Uploaded by

    api-266538182

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Types of Business

    Ownership
    BY GAGE ROCKWELL
    Sole Proprietorship
    Advantages:
    -Youre the boss
    -You keep all the profits
    -Maximum privacy
    -Start-up costs are low
    -Operation of business is simple
    -You can easily wind up your business
    Disadvantages:
    -You have unlimited liability
    -Your capacity to raise capital is limited
    -It can be hard to take holidays
    -Youre taxed as a single person
    -The life of the business is limited
    Partnership
    Advantages:
    -Two heads are better than one
    -Business is easy to establish and the start
    up cost is low
    -Youll have greater borrowing capacity
    -High-caliber employees can be made
    partners
    -There is limited external regulation
    Disadvantages:
    -if partners join or leave, you will probably
    have to value all the partnership assets and
    this can be costly.
    -the liability of the partners for the debts of
    the business is unlimited
    -there is a risk of disagreements and friction
    among partners and management
    Corporations
    Advantages:
    -Additional capital can be raised easily
    through stock markets, etc.
    -The ownership is represented by the
    number of share certificates held by a
    person, and this makes the transfer of
    ownership very easy.
    -The corporation is considered a legal
    person with perpetual existence. It exists
    until it is liquidated and death or
    change in ownership has no effect on
    the corporation.
    Disadvantages:
    -In case of corporations there is double
    taxation. First of all the corporate income is
    taxed at a flat rate and then the dividends
    paid to the shareholders is taxed.
    -Establishing a corporation is a complex
    process and requires registration with the
    central regulatory authority and listing on a
    stock exchange which required fulfillment of
    certain requirements related to the amount
    of capital, number of directors, etc.
    Franchises
    Advantages:
    -association with a well established
    brand, reputation and product or
    service
    -initial management training and
    continuing management assistance
    -assistance with outlet design and
    equipment purchasing
    Disadvantages:
    -The franchisee is not completely
    independent. Franchisees are required to
    operate their businesses according to the
    procedures and restrictions set forth by the
    franchisor in the franchisee agreement.
    - In addition to the initial franchise fee,
    franchisees must pay ongoing royalties and
    advertising fees.

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