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Forms of business ownership

Forms of business ownership. Sole proprietorship. Advantages. Pride of personal ownership Right to decide about distribution of any profits Owner makes all business decisions Opportunity to be one’s own boss Owner is manager. disAdvantages. Unlimited liability

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Forms of business ownership

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  1. Forms of business ownership

  2. Sole proprietorship

  3. Advantages • Pride of personal ownership • Right to decide about distribution of any profits • Owner makes all business decisions • Opportunity to be one’s own boss • Owner is manager

  4. disAdvantages • Unlimited liability • Capital limited to owner’s investment and credit • Ownership changes only if original owner sells • Limited life - Death or incapacity of the owner ends the business • Lack of professional management expertise

  5. partnership

  6. Advantages • Shared responsibilities • Distribute profits based on a written agreement • Additional owners may provide additional available capital • Two (or more) heads may be smarter than one

  7. disAdvantages • Unlimited liability • Capital limited to owners’ investments and borrowing power • Any profits must be divided between/among partners. • Limited life • Taxes on profits become personal debt for each partner

  8. corporation

  9. Advantages • Limited liability • Ease of raising capital • Ease of transferring ownership • Continuous existence • Professional management

  10. disAdvantages • Double taxation • Government regulation

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