Forms of Ownership
Business is the profitable activity in which the owner provides products or service to the customers in order to get profit. The main aim of the business is to make profit. The wrong decision on selecting the ownership affects the over all performance of the business. The business run by the one in order to take risk and profit is called the sole-proprietorship. The second form of the ownership is partnership which include more than two business partner in the firm. Corporation is the third form of the business ownership which is entity where the shares are sold, governed by the law and working as a unit.
Sole proprietorship is the form of the business ownership in which the whole business activity is run by the single person. The legal requirements for this ownership are minimal and it’s easy to organize. It is run by the single person and he/she has the full control over the activities. The earnings in a proprietorship are considered to be ...view middle of the document...
Control is also shared therefore there is little chance of misjudgments.
The third form of the business ownership is corporate where there are many share holders of the firm who have their own individual shares. This type of the ownership gives limited liability which means that there is no risk on person. The many share holders in this ownership gives access to more funds to run the company. If the owner is dissatisfied with the firm he/she can transfer the ownership. The structure of the corporate ownership is big hence there are high organizational expenses (i.e. for creating charter and file, establishing bylaws and issuing stocks). The financial disclosure is a problem to this type of ownership as the competitors know how the business is running and take advantage of it. The agency problem is another important problem in which the manager may do the things for his own benefit rather than the firm or the owners. The dual tax system (i.e. first by the company and the shared dividend as the personal tax) is the problem of the corporation.
Therefore I will like him to change the ownership form from the sole proprietorship to the partnership, being the sole proprietor of the sign board it provides him the limited funds and the limited skills. But if he changes his business form from sole proprietorship to the partnership then he will be provided with the additional funds and the losses are shared. also there will be more specialization which means the abilities and the qualities are shared among the partner in the business. Which leads him to get more experience working on a group and his vision to grow nationally and internationally finally gets fulfilled.
Binod Jung Katuwal
Forms of ownership
Writing: Very good. You made relatively few errors of usage and spelling. Your paragraphs were well structured, with each one expressing one idea only.
Thinking: Very good. You demonstrated that you understand the advantages and disadvantages of various forms of ownership. Your paper was well structured in general, although your conclusion was not tied to the rest of the paper, nor was it mentioned in your introduction.
Following directions: You wrote on the assigned topic. You wrote the minimum number of words. You used a serif font.
Your grade: 6/7