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Business Ownership Types Explained

This document discusses the basic forms of business ownership including sole proprietorships, partnerships, corporations, and limited liability companies. It outlines the key characteristics of each type such as limited liability, taxation, financial resources, and ease of formation. The advantages and disadvantages of each business structure are also summarized to help owners choose the most appropriate legal structure for their business needs.

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anika
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76 views20 pages

Business Ownership Types Explained

This document discusses the basic forms of business ownership including sole proprietorships, partnerships, corporations, and limited liability companies. It outlines the key characteristics of each type such as limited liability, taxation, financial resources, and ease of formation. The advantages and disadvantages of each business structure are also summarized to help owners choose the most appropriate legal structure for their business needs.

Uploaded by

anika
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Introduction to Business

How to Form a Business

Submitted to
Mahfuza Khatun
Assistant Professor
Finance & Banking
Faculty of Business Studies
Jahangirnagar University
 Savar, Dhaka, Bangladesh, 1342
Group Members

Anika Tasneem Hridi (1658)


Tahieat Foiroz (1652)
Nazia Isma (1643)
Muhsana Shafiqa(1660)
Overview

 Basic Forms of Business


 Sole Proprietorship
 Partnership
 Corporation
 Individuals Can Incorporate
 Limited Liability Companies
Basic Forms of Business Ownership

Business: An activity that seeks to provide


goods and services to others while at a profit.
Basic Forms of Business Ownership

1. Sole Proprietorship

2. Partnership

3. Corporation
Sole Proprietorship

 It simply refers to a person who owns the


business and is personally responsible for its
debts.
Sole Proprietorship

Advantages:
 Ease Starting and Ending The Business
 Being Your Own Boss
 Pride of Ownership
 Leaving a Legacy
 No Special Taxes
Sole Proprietorship

Disadvantages:
 Unlimited Liability
 Limited Financial Resources
 Management Difficulties
 Overwhelming Time Commitment
 Limited Growth
 Uncertainty of Life Span
Partnership

A partnership is a legal form of business with


two or more owners with unlimited liability.
Partnership

Classification:
 General Partnership
 Limited Partnership
 Master Limited Partnership
 Limited Liability Partnership
Partnership

Advantages:
 More Financial Resources
 Shared Skills and Knowledge
 Longer Survival
 No Special Taxes
Partnership

Disadvantages:
 Unlimited Liability
 Division of Profits
 Disagreements among Partners
 Difficulty of Termination
Corporation

A legal entity with authority to act and have


liability apart from its owners
Corporation

Advantages:
 Limited liability
 Ability to raise more money for investment
 Size
Corporation

Disadvantages:
 Initial Cost
 Extensive Paperwork
 Double Taxation
 Two Tax Returns
 Size
 Difficulty of Termination
 Possible Conflicts with Stockholders and
Board of Directors
Individuals Can Incorporate

 Individuals who incorporate to outsiders do


not issue stock to outsiders
 Doesn’t share all the pros and cons of large
corporations
 Limited liability and possible tax benefits
 Not mandatory to file for incorporation
through a lawyer
Limited Liability Comapanies

A limited liability companies (LLC) is similar to


an S corporation, but without the special
eligibility requirements
Limited Liability Companies

Advantages:
 Limited liability
 Choice of taxation
 Flexible ownership rules
 Flexible Distribution of Profits and Losses
 Operating Flexibility
Limited Liability Comapanies

Disadvantages:
 No Stock
 Limited Life Span
 Fewer Incentives
 Taxes
 Paperwork

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