Ownership Structure

Ownership Structure



Ownership Structure

Ownership Structure

When one is planning to start a business, firstly he/she should have to decide what company structure he will opt for, like for example there are three kinds of ownership structure mainly followed in the world by most of the people, first is the sole proprietorship, second is the partnership & last is corporation.

People with limited resources or who have just started their business or who are new in can start themselves as a sole proprietorship ,in this type of business ownership no formal proper documentations is required. Secondly its doesn't requires any registrations as in the case of a limited company or in partnership, if we talk legally it should be clearly understood that sole person who is running the business is inseparable from the business in any term, which means the owner is solely responsible for the loss or gain he is deriving from the business and will be liable of his obligations like debts or any court issue.

Now talking about partnership, as its name shows when two or more than two people starts any business it falls in the category of partnership business,, this can be started at any time by just having an agreement between the two parties, again no formal documentation is required as in the case of limited liability company, but normally this type of ownership is not recommended because of its cost & complex structure, especially if one is talking about the limited partnership

Third and last type of ownership is corporation, normally it is not recommended for small business because of its heavy cost structure, but the main benefit of corporation is that this structure limits the owner's personal liability; it differentiates itself from other ownership structure as it stands as a separate tax & legal ...