Understanding Business Ownership
Business ownership refers to the legal possession of a company. It determines rights, liabilities, and involves varying levels of control, risk, and profit potential.
Sole Proprietorship Explained
A sole proprietorship is owned by one person. It's the simplest form and offers complete control, but blends personal and business assets, raising personal liability.
Partnerships in Depth
Partnerships involve two or more people. Profits are shared and decisions are collaborative. General partnerships offer equal control, whereas limited partnerships have silent partners.
Corporate Structures Unveiled
Corporations are more complex, seen as separate legal entities. Shareholders own stock, electing a board for governance. This structure limits personal liability and enhances capital-raising abilities.
LLCs: A Hybrid Model
Limited Liability Companies (LLCs) blend partnership's tax benefits with a corporation's liability protection. Owners, called members, can include individuals, corporations, and even other LLCs.
Cooperatives: Member-Owned
Cooperatives are owned and governed by members who use its services. Profits are distributed among members, and decisions are made democratically, often prioritizing community benefits.
Innovative Ownership Models
Recent trends include employee stock ownership plans (ESOPs), allowing workers to gain company shares. Another is the B Corporation, focusing on social and environmental performance.
What does business ownership determine?
Company naming conventions
Rights, liabilities, control levels
Employee management systems
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