A business is a form of trading that involves selling of various products and services to the clients or customers in different parts of the globe. There are several methods of beginning a business used by different people across the world. One can either start a business alone without having to cooperate with any other party or even decide to cooperate with his or her friend to come up with a business. These are generally some of the major ways that have led to different forms of business ownerships across the world.
It is generally very important for every business person or an entrepreneur to make sure that he or she first considers the many forms of business ownerships available so as to know the best ownership that can suit his or her business not only for personal needs but also to promote the success of the business as a whole. Business ownerships however contribute a lot to the way your business is organized. The major forms of business ownerships recommended are discussed below.
The first form of a business ownership is known as sole proprietorship. Among the many forms of business ownerships known, sole proprietorship is however one of the most basic form of business ownership. Sole proprietorship however is a form of business ownership where there is only one person who owns the business and he or she is responsible and in charge of every operation or activity carried out in the business.
In the sole proprietorship ownership, the business person is actually liable of all the mistakes and losses made in the business. Any kind of return or income that the business generates only belongs to the owner of the business who is supposed to keep them or use them to expand his or her business further. There are however some few reasons why sole proprietorship business is very important one of them being the flexibility and less capital requirements.
The second most common form of ownership that every business person should also consider when starting a business is the partnership ownership. Partnership form of ownership is a business that is owned by more than one person either two or more co-owners. Unlike sole proprietorship ownerships where profits are kept by the owner, the partners share the profits generated equally under partnership ownerships. The third form of business ownership is known as corporation ownership. One of the major benefits that come with corporation business ownerships is that they have many sources of finance including equity and quasi finance thus making it easier for them to raise capital. Co-operatives, franchise as well as limited liability companies are some other forms of business ownerships.