Académique Documents
Professionnel Documents
Culture Documents
BUSINESS OWNERSHIP
i. Sole Proprietorship
ii. Partnership
iii.Corporation
iv. How Ownership Can Effect Risk and
Return
v. Obtaining Owner of An Existing Business
Business Ownership
Legal right to possess
something/businesses.
The state of being an owner.
Business Ownership
3 main types of ownership :
Sole Proprietorship
Partnership
Corporation
Sole Proprietorship
Sole Proprietorship
Advantages
Simple to create
Least costly form
Profit incentive
Total decision-making
No special legal restrictions
Easy to discontinue
Sole Proprietorship
Disadvantages
Unlimited personal liability
Limited skills and abilities
Feelings of isolation
Limited access to capital
Lack of continuity of business
Partnership
An association of two or
more people who co-own
a business for the
purpose of making a
profit
A partnership agreement or the Uniform Partnership Act
Partnership
Advantages
Easy to establish
Complementary skills
Division of profits
Larger pool of capital
Ability to attract limited partners
Little governmental regulation
Flexibility
Taxation
Partnership
Disadvantages
Unlimited liability of at least
one
Difficulty in disposing of
interest
Lack of continuity
Potential for personality and
authority conflicts
Partners bound by law of
agency
Special Partnerships
Limited partnership-composed of at least
one general partner and at least one limited
partner
Limited liability partnership-a special type
of limited partnership, in which all partners
are limited partners
Master limited partnership-a partnership
whose shares are traded on stock
exchanges, just like corporations
Corporations
A separate legal entity apart from its
owners which receives the right to
exist from the state in which in which it
is incorporated
Domestic
Foreign
Alien
Publicly held
Closely held
Corporations
Advantages
Limited liability of
stockholders
Ability to attract capital
Ability to continue
indefinitely
Transferable ownership
Corporations
Disadvantages
Cost and time in
incorporating
Double taxation
Potential for diminished
incentives
Legal requirements and
red tape
Potential loss of control
?
Low risk = Low return
Obtaining Owner of An
Existing Business
An individual seeking to go into
business for himself can either start a
company or buy an existing one.
Acquiring an existing business means
you have immediate cash flow; the
company already has customers,
assets and a brand name or reputation
in the marketplace.
Obtaining Owner of An
Existing Business
Step 1
Assess your
interest and skills
Step 2
Potential funding
cost
Step 3
Legal Framework
Step 4
Referal network
Step 5
Select the company
Step 6
Post-acquisition
plan