FORMS OF BUSINESS OWNERSHIP

작년


image source

Business organizations can be classified into the following forms:

  • The sole proprietorship
  • The partnership
  • Private limited companies
  • Public limited companies
  • Co-operative associations
  • Public enterprises

The Sole Proprietorship
This is commonly called the one-man business. The one-man business has the following characteristics

  1. Formation: it is easy to start
  2. Ownership: it is owned by one person who is in charge but may have many employees.
  3. Decision-making: He takes the major decisions. Such a decision may not be efficient
  4. Capital: He provides the needed capital from personal savings, friends, and relations or through debt such as bank loans. Therefore the capital of the one-man business is relatively small.
  5. Risk-bearing: The business risks are borne by the owners alone
  6. Management: The owner is the manager, hence, its management may not be efficient and effective
  7. Personality of the business: The law does not distinguish between the business and the owner, therefore, the business is not a separate legal personality or entity.
  8. Liability of owner: He does not have limited liability because the failure of the business could lead to the sale of his private assets.
  9. Owner-employees relationship: There is a cordial relationship between the owner and his employees
  10. Ownercustomer's relationship: The relationship between the owner and the customers is cordial because he interacts with them, in most cases, directly.

Thanks for reading.

All contents are rightfully mine and they are imported from whaleshares

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
STEEMKR.COM IS SPONSORED BY
ADVERTISEMENT