Main features of different forms of business organization
What are the main features of different forms of business organization?
Different forms of business organization have distinct features. Sole traders have a single owner with unlimited liability. Partnerships involve two or more individuals who share profits and liabilities. Private limited companies have limited liability and a separate legal identity. Public limited companies issue shares to the public and have more regulatory requirements. Franchises allow entrepreneurs to operate under an established brand. Joint ventures involve two or more entities forming a separate business entity for a specific project or purpose.
What are the main features and advantages of sole proprietorship?
Sole proprietorship is a business structure where a single individual owns and operates the business. Its main features include simplicity of formation, direct control and decision-making, ease of tax reporting, and retention of all profits. Advantages of sole proprietorship include autonomy and flexibility, low start-up costs, minimal regulatory requirements, and simplicity of dissolution. However, the owner has unlimited personal liability for business debts and obligations.
What are the main features and advantages of a partnership?
Main features of a partnership include shared ownership, shared decision-making, shared profits and losses, and shared liability among partners. Advantages of a partnership include the ability to combine complementary skills and resources, shared workload and decision-making, potential tax benefits, and the ability to attract capital and talent through multiple partners.
What are the main features and advantages of a corporation?
Main features include limited liability, separate legal entity, ownership through shares, and perpetual existence. Advantages include access to capital markets, limited personal liability for shareholders, potential for growth and expansion, and the ability to attract top talent through stock options and incentives.