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. Starting a business is something that can be done in various ways. 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. The many ways that different people have been using to start up their businesses across the world have prompted the introduction of different forms of business ownerships across the world.
The growth and general success of a business depends on so many factors one of them being the kind or form of the business ownership and thus important for a business person whether a beginner or a grown entrepreneur to first consider the many types of business ownerships before starting a business. Business ownership generally implies the way a business is organized. There are different forms of business ownerships that any business person can consider for his or her business where some of the most common business ownership forms are discussed below.
Sole proprietorship is the first most common form of business ownership that one should consider when before starting up a business. It is important to know that most of the businesses across the world have sole proprietorship ownership thus making this form of ownership the most common and basic among the others. Sole means one and thus sole proprietorship form of ownership means that the business is owned by only one individual who is responsible for all the business operations.
It is important to know that there is no any other kind of a party that can be liable for various business losses apart from the owner of the business in the sole proprietorship business. It is also important to note that in this business, the profits and incomes generated by the business are only kept by the business owner. There are however some few reasons why sole proprietorship business is very important one of them being the flexibility and less capital requirements.
The other most common form of business ownership is the partnership form of 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 other forms of business ownerships are the corporations. 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. The other forms of business ownerships include co-operatives, franchise as well as limited liability companies.