What factors should be considered before choosing a form of ownership. Describe which form is the best?
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What factors should be considered before choosing a form of ownership. Describe which form is the best?
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Factors to be considered are :
1) Ease of formation
2) Flexibility
3) Cost and time taken for formation
4) Legal compliances
5) Amount of funds to be raised
6) Number of persons to be involved
7) Scale of project
Sole Proprietorship
This organization is owned by single person and is the simplest form of organization. He is fully responsible for all debts and obligations related to his or her business and have got unlimited liability.
Advantages
? Ease of formation
? Low start-up costs
? Less administrative paperwork than some other organizational structures (such as incorporation)
Disadvantages
? Difficulty raising capital
? Unlimited liability
? Lack of continuity in business organization in the absence of the owner
http://www.cbsc.org/servlet/ContentServer?pagename=CBSC_ON%2Fdisplay〈=en&cid=1085667968842&c=GuideFactSheet as retrieved on 25 Aug 2006 05:13:20 GMT.
2. Partnership
A partnership (also referred to as a general partnership) is a business arrangement where two or more people (who are not husband and wife) are owners of a business. Unlike a corporation, you do not need to file any documents with the state to make your business a partnership. A partnership is created by default, unless the business is specifically formed as some other type of business entity, such as a ...
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