Sole proprietorship: its advantages and disadvantages
| Form of business | Peculiarities | Advantages | Disadvantages |
| Sole traders (sole proprietor-ship ) | Simplest form of business, arranged and run by one person | Easy to start; Very flexible, The owner has absolute control | - has unlimited liability; - high risk of failure because of competition; - it lacks stability because of death or illness; - difficulty of raising money and slow growth of business |
Partnership: its types
| Form of business | Peculiarities | Advantages | Disadvantages |
| general (In a general partnership, the partners have unlimited liability for the debts and obligation of the partnership, pretty much like a sole proprietorship) | consists of two or more persons (up to 20) who bind themselves to contribute money or industry to a common fund, with the intention of dividing the profits among themselves | - easy to organize; - doesn’t pay corporate tax; - potential sources for raising investment capital | - the business suffers if partners have serious disagreements; - difficult to get rid of a bad partner; - in case of death the partnership may stop to exist |
| In a limited partnership, one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions | |||
Public and private company
Public company (unlimited number of shareholders)
Private company (limited number of shareholders)
A corporation is a juridical entity established under the Corporation Code and registered with the SEC. It must be created by or composed of at least 5 natural persons (up to a maximum of 15), technically called “incorporators.”
Advantages
- The liability of the shareholders of a corporation is limited to the amount of their capital contribution;
- opportunities of sharing experience;
- the financial power to develop and sell goods
Disadvantages
- a corporation is more difficult and expensive to create, organize and manage.
- it has more strict regulations;
-double taxation (corporate + income taxes);
- it has much less freedom of operation
Franchising
| Franchising | A large company allows entrepreneurs to use corporate brand name (franchiser; franchisee; franchise) | -franchisees get training and support; -using well-known brand name; -easier to raise money | - a franchisee has less independence; - he has to pay royalty payments (some part of profit); - a franchiser can not sell his business |
Дата добавления: 2020-01-07; просмотров: 121; Мы поможем в написании вашей работы! |
Мы поможем в написании ваших работ!