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Note Bua 101 Part 1

The document discusses different types of business organizations including sole proprietorships, partnerships, corporations, and cooperatives. It outlines key features, advantages, and disadvantages of each type. Sole proprietorships are owned and managed by one person while partnerships involve two or more people contributing funds and efforts. Corporations exist as legal entities separate from owners. Cooperatives are owned and controlled by their users.

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546 views

Note Bua 101 Part 1

The document discusses different types of business organizations including sole proprietorships, partnerships, corporations, and cooperatives. It outlines key features, advantages, and disadvantages of each type. Sole proprietorships are owned and managed by one person while partnerships involve two or more people contributing funds and efforts. Corporations exist as legal entities separate from owners. Cooperatives are owned and controlled by their users.

Uploaded by

durugofavour64
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Business play a vital role in economic development and contribute significantly to the

growth and prosperity of a nation especially job creation, drive for innovation,
generation of economic growth. Businessalso contribute to the overall fiscal health of
the economy. Government regulations of business help protect consumers from unfair
business practices, fake product and fraud. However, excessive government regulation
and bureaucracy can hinder business growth and innovation. Hence, government
involvement in business can often affect productivity and economic growth. Only
when the government promote a business-friendly environment will they achieve
positive result. Lack of investment to create new busineses is one of the reason for
unemployment and poverty in the society.

Advantages Sole propritorship


Profit of a sole propritor are not taxed
Sole propritor enjoys privacy,they are not under any legal obligation to publish their
ptofit for public consumption
Disadvantages of a Sole propritorship
(i) Bear all losses and risks alone
(ii) they lack sufficient financial resources to expand
Iii) they lack continuity -when the sole proprietors retires or dies, the business may
end like that.

Partnership
Partnership is a business owned by two or more persons for profit purpose. The
partners contribute both funds and efforts to set up and manage the business sharing
profit (or loss) on an agreed basis.

Features of Partnership
1.It is formed by two or more people,2. They are formed for profit reasons.3. Sources
of capital is contribution from the partners

Types of Partnership

General Partnership: All partner r responsible to manage the business with equal right
in everthing.
Limited Partnership:In this category responsibilities are restricted thus all partners do
not take equal responsibilities in managing the business.

Article of Partnership or Deed of Partnership is a document that regulates the


activities of the business.

Advantages of partnership

Stand a chance to expand. (ii) Combined Abilities and Skills: partner come to the
business with various talent which may advance the company more than a one-man
business (iii) Greater Continuity: the partnership has a very high tendency of
continuity even after death. (iv) Ease of Formation with few governmental
regulations.(v) Joint and better decision: That two good heads are better than one and
this is applicable to partnership.
Disadvantages of Partnership
(i) Unlimited Liability: If the business fails in the process, assets will be sold to offset
their liabilities.
(ii) The business has no legal backing.
(iii) Death of a partner can lead to the death of a business especially the active
partner.
Iv) Unrestricted expansion: There is no limit to where the company can expand to
provide the company has a large capital.
V) Capital Transfer: you can have your capital transferred to you at will if you are
not satisfy with the company.

Corporation

A corporation is a business organization that exists as a legal entity separate and


distinct from its owners (shareholders) and these shareholders are granted certain
rights and privileges under the law.

A legal entity is an organization that is recognized by the law as having a separate


legal existence. It can sue and be sued.

Features Corporation
1.A corporation is often documented under state law.
2.The length of its life is independent of its owners lives (the org could still exist even
if the owners die).

Advantages of Corporations
Easy access to loan, Multiple engagement in business,Transfer of ownership,
Separation of ownership from management.

Disadvantages of a Corporation
1) High Organizational Expense, Possible conflict with board of directors, Financial
disclosure.

COOPERATIVES
Cooperatives are other forms of business organization created for mutual gains. A
cooperative is a business organization owned and controlled by the people who use it
(producers, consumers, or workers with similar needs) to pull their resources together
for mutual gain.

Types of Cooperatives
Consumer cooperatives which is owned by individuals who purchase goods or
services from the cooperative.
Worker cooperatives which is owned and operated by the employees
Agricultural cooperatives which is owned by farmers or agricultural producers.
Farm cooperative aimed at getting farmers together to get better prices for their food
products, buy and sell fertilizers, farm equipment, seed, and other products needed on
the farm. The farm cooperatives do not pay the same kind of taxes that corporations
do, and thus have an advantage in the marketplace.
Housing cooperatives where members collectively own and manage housing units.

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