forms of ownership

By SweetnessNkosiUniversity ofJohannesburg

FORMS OF

OWNERSHIP

BUSINESS ORGANIZATIONS: THE PRIVATE SECTOR

Sole tradersPartnershipsPrivate limited

companiesPublic limited

companiesCo-operativesClose corporationsfranchise

Choice of Suitable form of ownership – A Crucial Decision

The form of ownership determines the -Division of ProfitsExtent of liabilityExtent of RiskDivision of PowerControl of OwnerLong term commitment, cannot be altered easily

FORMS OF OWNERSHIP DETERMINES…

Ease of Formation

Suffi cient Finances

Limited Liability

Transferability of Interest

Effi cient 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 personsLeast numerous business organizationSmallest 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 VentureS-

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

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REFERENCES