Forms Of Small Business Ownership

Forms of Small
Business Ownership
Chapter 8

Three business ownership choices:
1.Sole Proprietorship
2.Partnership
3.Corporation

Sole
Proprietors
hip
A business owned and operated by a single person. What are the
Advantages of
Sole
Proprietorship ?

Advantages of Sole
Proprietorship
 Ease and Cost of Formation
 Distribution and Use of
Profits
 Control of the Business
 Government Regulation
 Taxation
 Closing the Business

What are the
Disadvantages of
Sole
Proprietorship?

Disadvantages of Sole
Proprietorship
 Owner’s Lack of Ability and
Experience
 Difficulty in Attracting Good
Employees
 Difficulty in Raising More
Capital
 Limited Life of the Firm
 Unlimited Liability of the

Partners hip Partnership


A legal association of two or more persons as co-owners of an unincorporated business.

 It is formed with the purpose of eliminating some of the disadvantages sole proprietorships while retaining some of their advantages.

of

What are the
Advantages of
Partnership?

Advantages of
Partnership
 Ease of Formation
 Pooling of knowledge and skills  More sources of capital
 Ability to attract and retain employees
 Tax advantages

What are the
Disadvantages of
Partnership?

Disadvantages of
Partnership
 Unlimited Liability
 Limited life
 Potential conflict between partners
 Difficulty in dissolving the business What are the types of
Partnership?

1.General
Partnership
 An association of two or more persons, each with unlimited liability, and who are actively involved in the business.

2.Limited
Partnership
 An arrangement in which the liability of one or more partners is limited to the amount of assets they invested in the business.

Partnership
Agreements
 A document designed to prevent or at least minimize disagreements between partners.

1)The purpose of the business
2)The terms of the partnership
3)The goals of the partners and the partnership
4)The financial contribution made by each partner at the beginning and during