forms of ownership

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Information about forms of ownership

Published on March 10, 2014

Author: snnkosi


By Sweetness Nkosi University of Johannesburg

Service Business Carry out activities that are consumed by its customers Intermediaries Sell goods and services Producers Create products and services used by other individuals and businesses

BUSINESS ORGANIZATIONS: THE PRIVATE SECTOR Sole traders Partnerships Private limited companies Public limited companies Co-operatives Close corporations franchise

Choice of Suitable form of ownership – A Crucial Decision The form of ownership determines the - Division of Profits Extent of liability Extent of Risk Division of Power Control of Owner Long term commitment, cannot be altered easily FORMS OF OWNERSHIP DETERMINES…

 Ease of Formation  Sufficient Finances  Limited Liability  Transferability of Interest  Efficient Management IDEAL FORM OF OWNERSHIP

SOLE PROPRIETORSHIP A business owned and managed by one individual; the business and the owner are one and the same in the eyes of the law

Owned by 2 or more persons Least numerous business organization Smallest proportion of sales and net income PARTNERSHIPS

CORPORATIONS Corporations account for 1/5 of all firms in the U.S. and 90% of all sales A corporation is a form of business organization recognized by law as a separate legal entity having all the rights of an individual

Limited Liability Partnership & Company Joint Venture S- Corporation Nonprofit Corporation Franchise Cooperative Other Forms of Business Ownership UNT in partnership with TEA, Copyright ©. All rights reserved 8

What is Franchise? A franchise is a business established by one person who buys copyrights of another firm and is allowed to produce and distribute that product. FRANCHISING

 Nature of Business  Size and Area of Operations  Degree of Control Desired  Amount of Capital Required  Degree of Risk Involves FACTORS TO CHOICE OF OWNERSHIP organisation 27056960 organisation-pp REFERENCES

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