Business Ownership
Business ownership refers to the legal right to control a business and its resources. There are several forms of business ownership, including sole proprietorship, partnership, corporation, and cooperative. Each form has its own advantages and disadvantages in terms of liability, taxation, and decision-making authority.
6 Key excerpts on "Business Ownership"
eBook - ePubThe Stock Market Game
A Simulation of Stock Market Trading (Grades 5-8)
- Dianne Draze(Author)
- 2021(Publication Date)
- Routledge(Publisher)
...Business Ownership DOI: 10.4324/9781003238935-3 Types of Business Ownership In a capitalistic economy, businesses are owned and operated by people (as opposed to the government). People engage in business because they want to make a profit. By investing capital (usually money, but sometimes property and equipment), they can start a business. The intent of these business owners is to use these assets to make goods or offer services that other people will buy. They then can make a profit. There are three main types of ownership of businesses. They are: Sole Proprietorship These businesses are owned and operated by one person (though the owner may hire employees to do some of the work). It is the most widespread form of small Business Ownership. Partnership These businesses are owned by two or more people who are co-owners of the business. In most cases, they share the expenses, the work, and the profits from the business. Corporation A corporation is a legal entity. It is an association of individuals created by law that has powers and liabilities independent of its members. Legal papers must be filed with the state in which a business operates before it can become a corporation. Most businesses do not begin as corporations. Sole proprietorships and partnerships may eventually change the ownership to a corporation because of legal or economic reasons or because they want to raise capital by selling shares of the business. Forming a corporation is expensive and legally complicated. Corporate Ownership Corporations are owned by people who own stock in the business (stockholders). Some corporations may have many shareholders, and some may have only a few owners. In some corporations, the person or persons who started the business may own all the stocks. Other corporations may offer to sell stock in their business to other individuals. This is usually done when there is a need to raise money so the business can make more products or expand what they are presently doing...
eBook - ePubForm a Partnership
The Legal Guide for Business Owners
- Denis Clifford, Ralph Warner(Authors)
- 2020(Publication Date)
- NOLO(Publisher)
...Sometimes, people with different temperaments work out very well as partners. And sometimes, people who are longtime friends with very similar personalities can’t develop a harmonious business relationship. Probably, the best you can do is ask yourself whether you can imagine being in a close business relationship with your prospective partners ten or more years from now. If you can’t, think twice about going forward. Business Structure Options There are five common legal forms of Business Ownership: • partnership • sole proprietorship • corporation • limited liability company, and • limited partnership. Some states have distinct subcategories of these five, especially partnerships. For example, there’s a creature called a “mining partnership” used for mining and oil ventures in some states. In this chapter, we’ll just concern ourselves with the basic forms. To help you choose the business structure that best suits your needs, this chapter explains the legal and practical consequences of each option. Of course, our emphasis is on the partnership form, but don’t assume that it must be the right one for you without exploring your alternatives. We’ve received letters from readers of earlier editions telling us that after reading these materials, they decided to form a small corporation or a sole proprietorship. That’s great; the time to consider your options is here at the start. Once you’ve created your legal form, it takes some time and trouble to change it. Partnerships In this section, we give you a quick look at the nature of partnerships, so that you can compare them to corporations, limited liability companies, and sole proprietorships. Later in this chapter, we’ll explore the partnership legal form in more depth. Here are five key points about partnerships: 1. A partnership is a business owned by two or more people. 2. Each partner can perform all acts that are necessary to operate the business, including hiring employees and spending or borrowing money...
eBook - ePub- Richard D. Harroch(Author)
- 2010(Publication Date)
- For Dummies(Publisher)
...Chapter 1 Choosing Your Business Entity In This Chapter Flying solo: Sole proprietorships Getting a grip on partnerships Checking out corporations Looking into LLCs W hen starting a business, you need to decide early on what legal form the business should take. The common choices are sole proprietorships, general partnerships, limited partnerships, C corporations, S corporations, and LLCs (Limited Liability Companies). Each entity has advantages and disadvantages, and the right choice depends on the nature of your proposed business and various tax and liability issues. In this chapter, I outline the key points that you need to know about choosing the right entity for your business. Form 1-1 on the CD-ROM (and shown later in this chapter) summarizes the key differences between various types of business entities. You need to pay special attention to tax and liability issues. Form 1-1: Comparison Chart for Different Business Entities, page 1 of 2. Form 1-1: Comparison Chart for Different Business Entities, page 2 of 2. Setting Up Sole Proprietorships Some businesses are formed as sole proprietorships. In this case, the business has only one owner — you. Sole proprietorships are easier to set up than corporations or other entities. To establish a sole proprietorship, you typically need to file a fictitious name certificate at a local or state governmental office if you’re doing business under a name different than your own. This certificate, in essence, notifies the world who the business’s true owner is, such as “John Smith, d.b.a. Blue Vision Flowers.” The d.b.a. abbreviation stands for “doing business as.” Sole proprietorships are not advisable if you plan to do any significant business because you face unlimited liability for the business’s debts — a real disadvantage...
eBook - ePub- Obioma A. Ebisike(Author)
- 2019(Publication Date)
- Wiley(Publisher)
...This means that if one of the owners dies, the surviving owner becomes the sole owner of all the interest in the real estate business. In a common ownership there is no right of survivorship, thus, if one of the owners dies, the ownership interest will go to the dead owner's heir(s). Because in the United States the laws vary by state with regard to the characteristics of common and joint ownership, it is important to consult an attorney when setting up this type of ownership. Apart from common and joint ownership, there is a similar third type of unincorporated ownership called tenancy by the entirety. This is available only to married couples, and ownership is treated as if the couple were a single individual. In some states in the United States, the same right is also given to domestic partners. PARTNERSHIPS Instead of going it alone in a real estate venture as a sole owner, an investor might decide to collaborate with one or more additional investors in the business venture. By partnering with these additional investors, the business would have far more resources available to it. A partnership is an unincorporated entity under state statutes and common law in the United States, and does not have any specific statutory law governing it in the U.S. federal government. It is, however, formed by the partnership agreement of the partners. This agreement governs the relationship between the partners and the management of the partnership. This form of ownership is defined by the Uniform Partnership Act (UPA) as “an association of two or more persons to carry on as co-owners a business for profit.” As stated in the definition, to qualify as a partnership, the association has to be a business carried out for profit. The owners of a partnership are called partners; their partnership interests do not have to be equal. Each partner's ownership interest is based on the agreement of the partners...
eBook - ePub- Peter Nayler(Author)
- 2006(Publication Date)
- Routledge(Publisher)
...C h a p t e r 5 Legal Forms of Business Organisation Introduction Regardless of its nature and where it is conducted, a business has to be structured within a defined legal framework. In every jurisdiction, the law provides a number of options from which to choose. The proprietors of the business will select the form best suited to their particular needs. These may relate to issues such as limitation of liability, flexibility of management structures, privacy of financial data, taxation, and sources of finance. As the structures available are creatures of the law, they will be regulated by the detailed rules of the particular country involved. While no two countries’ laws will be the same, at a general level it is possible to identify forms of business organisation in most jurisdictions that possess broadly similar characteristics. In this chapter, examples are taken from the UK, the USA, France and Germany. The main issues which will be examined relate to formation, liability of members of the organisation, management and control, and liability of those entrusted with the management of the business towards investors and outside creditors. A person wishing to set up a business must select from the options available a legal structure to act as a vehicle for the conduct of the business. In some jurisdictions the menu of choice might be more extensive than in others; however, the laws of most countries recognise forms of business organisation, which can broadly be categorised as follows: the sole proprietorship; partnerships of one form or another; various types of company with limited liability. As regards the terminology used in connection with the above, it should be noted that in civil law countries the term ‘company’ tends to be employed for both partnerships and limited companies...
eBook - ePub- Stephen Mettling, David Cusic, Jane Somers(Authors)
- 2021(Publication Date)
- Performance Programs Company LLC(Publisher)
...An elected board of directors oversees the business. Officers and managers conduct day-to-day activities. Officers and directors may be held fully liable for the corporation’s actions, while shareholders are liable only to the extent of the value of their shares. Corporations, like individuals, may own real estate in severalty or as tenants in common. Partnership In a partnership, two or more persons agree to work together and share profits. A general partnership is not a distinct legal entity like a corporation. All the partners bear full liability for debts and obligations. A limited partnership has two or more partners, one or more being general partners and the others limited partners. The general partners run the business and are liable for debts and obligations. The limited partners are liable only to the extent of their investment in the partnership. Both general and limited partnerships may own real estate. Limited liability company A limited liability company (LLC) combines features of the corporation and the limited partnership. The LLC offers its members limited liability like a corporation, but income is passed directly to the members and is taxed to them as individual income. The management structure is flexible. Like a corporation or a partnership, an LLC may own real estate. Page 48 CONDOMINIUMS Airspace and common elements Interests and rights Condominium creation Organization and management Owner responsibilities A condominium is a hybrid form of ownership of multi-unit residential or commercial properties...
