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Different Forms of Business Ownership

Posted On : Jan-19-2012 | seen (1017) times | Article Word Count : 501 |

One of the first decisions a businessman must make is to differentiate the legal structure i.e. sole proprietorship, partnership, corporation, etc. This is the first right step for the business objectives of the company and of all those involved.
Now a days starting, owning, and operating your own business can be a complicated process. The process is filled with decisions for everything from choosing what types of business and shares of stock to issue for an organization to choosing a name for the business. All of these decisions must be made in the backdrop of a multitude of legal and practical consideration.
One of the first decisions a businessman must make is to differentiate the legal structure i.e. sole proprietorship, partnership, corporation, etc. This is the first right step for the business objectives of the company and of all those involved. This decision can be complicated because business law incorporates aspects of statutory law, case law, procedural rules, and common law concepts. On top of all the legal aspects, there are also many practical considerations to examine. For instance, structural concerns about management and control of the business should play an important role in your decision.
1. Sole Proprietorship
Single proprietorship is the simplest form of organization in most of the countries in the world. Unlike other forms of entity, it is usually not governed by special laws. A proprietorship is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. The single proprietor has unlimited liability since creditors of his business may proceed not only against the assets and properties of his business but also after his own personal assets and properties. A sole proprietorship essentially refers to a natural person or individual doing business in his or her own name and in which there is only one owner and no partners.

2. Partnership
A partnership is a form of business ownership in which partners share with each other the profits or losses of the business undertaking according to their agreements. The consideration of a partnership whether it is a separate and distinct legal entity separate from its owners varies in different countries. A general partnership refers to an association of persons or an unincorporated company created by agreement by two or more persons in which the owners are all personally liable for any legal actions and debts the company may face.

3. Corporation
A corporation is a type of business entity which has a legal entity separate and distinct from its owners. The owners of the corporation enjoy a limited liability advantage in the sense that the creditors of the corporation may only run after the assets and properties of the business or corporation but not on the personal assets and properties of the owners. Corporations are more difficult to establish and register than proprietorships and partnerships because they are govern by different and special laws. However, establishment of corporations bear an accumulation of larger business assets and capital. It is also known that corporations are among the biggest companies in the world.

Article Source : http://www.articleseen.com/Article_Different Forms of Business Ownership_136044.aspx

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Value 360 Communications is a full service PR Agency in Delhi delivering on client's brand image reputation, visibility and preference goals on a local and national level. Leading PR Company provide other services like: Digital Media Promotion, vent Management, Investor and Analyst Relationship, Crisis Communications, Integrated Marketing and Strategic Counsel.

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Category : Business : Public Relations

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