Group 3

Ownership & Organization

Ownership & Organazing
 Ownership

Ownership is the state, act, or right of owning something,

i.e., possessing something. The term may also refer to an
organization or group of owners. It is the exclusive and
ultimate legal right to a lawful claim or title
There are four forms of business
ownership, they are:
Sole Proprietorship Partnership

Corporation Limited Liability

Company
 Sole Proprietorship

•An unincorporated business owned by a

single individual.
•The law does not distinguish between the
business and the owner.
 Sole Proprietorship
Advantages
• requires only registration and licenses
• quick, easy and inexpensive to
establish
• all profits to owner and included with personal
income for tax purposes
 Sole Proprietorship
Disadvantages
• harder to raise capital than partnership or
corporation
• unlimited liability
• limited to owner’s knowledge
 Partnership
•An unincorporated business owned by more than
one individual.
•The law does not distinguish between the
business and the owners.
•Profits divided according to each partners share
of the business
 Partnership
Advantages
• limited regulations
•more capital resources
• quick, easy and inexpensive to establish
 Partnership
Disadvantages
• possible disagreements
• partners assume unlimited liability for business
debts and obligations
• business income taxed at higher personal
rates
 Corporation
•Profits of the corporation are distributed to the
shareholders by way of "dividends".
•The more shares one owns, the more dividends
they will receive.

•Corporations can be public (traded) or private

 Corporation

Advantages
•Unlimited life, so business continues
uninterrupted if owner(s) die
•Ownership easily transferred
 Corporation
Advantages
•Contract for employee benefits plans

•possible lower taxation rate (profits &

dividends)
 Corporation

Disadvantages
•Costly to set up due to government fees,
name searches, legal fees

•Requires annual maintenance from accountant and

lawyer for reports and meetings/filings
 Limited Liability Company

•Similar to a limited partnership, an LLC

provides owners with limited liability while
providing some of the income advantages of
a partnership.
 LLC
Advantages
•Limits liability to the company owners for debts
or losses

•The profits of the LLC are shared by the owners

without double-taxation
 LLC
Disadvantages
•Ownership is limited by certain state laws

•Agreements must be comprehensive and

complex
 Organization

A business organization is an entity aimed at carrying on

commercial enterprise by providing goods or services, to
meet needs of the customers.
 Types of Organizations

Partnership Corporation

Sole Proprietorship
 Partnership

- The partnership is the optimal structure because this

simplifies the tax filing requirements (i.e., no tax return for
the partnership, rather the income flows to their individual
returns
 Sole Proprietorship

- A sole proprietorship can be explained as a kind of

business or an organization that is owned, controlled and
operated by a single individual who is the sole beneficiary
of all profits or loss, and responsible for all risks.
 Corporation

- A corporation is a business entity that is owned by its

shareholder(s), who elect a board of directors to oversee
the organization’s activities.