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Business Ownership and Organization

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37 views

Business Ownership and Organization

Uploaded by

angelomarkvidad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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• Importance of choosing the right business

ownership structure
• Overview of how business organization
impacts operations, taxes, and liability
Definition: Business owned and
operated by one individual
Advantages:
• Simple to establish
• Full control over decisions
• Owner keeps all profits
Disadvantages:
• Unlimited liability
• Limited access to capital
• Business ends when the owner
retires or passes away
This is the simplest and most common
type of business ownership, where one
person owns and runs the business. It’s
ideal for small businesses or
individuals starting out because it
requires minimal paperwork and costs.
However, the owner is personally liable
for all debts, meaning personal assets
like a car or home could be at risk.
Partnerships are great when two or more
people share a common vision and want to
pool resources. In a general partnership, all
partners share liability and profits equally. In
a limited partnership, one partner may only
invest money and have limited liability, while
another manages the business. The challenge
lies in balancing relationships and resolving
disputes.
A corporation is a separate legal entity,
meaning it can own assets, enter
contracts, and be taxed independently
from its owners. While shareholders enjoy
limited liability, setting up a corporation
involves more paperwork, and profits are
taxed twice—first at the corporate level
and again when distributed as dividends.
An LLC combines the liability protection of a
corporation with the tax benefits of a
partnership. Owners, called members, aren’t
personally liable for business debts. LLCs are
particularly popular for small-to-medium
businesses that want flexibility without the
complexity of corporations.
Co-ops are owned and controlled by their
members, who use the business's
services or products. For example,
farmers may form a co-op to sell
products collectively. Decisions are
made democratically, often on a one-
member, one-vote basis. Profit is shared
among members, but decision-making
can be slower due to the collaborative
nature.
A franchise is a business model where
a business owner (franchisor) licenses
its brand, operating model, and
intellectual property to another
individual or business (franchisee) in
exchange for a fee or royalties. It
allows the franchisee to operate a
business under the franchisor’s
established name and system.

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