Business Ownership

11 Key excerpts on "Business Ownership"

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  eBook - PDF

  Business Management

  • James Burrow, Brad Kleindl, Michael Becraft, , James Burrow, Brad Kleindl, Michael Becraft(Authors)
  • 2016(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  The three legal forms of Business Ownership are proprietorships, partnerships, and corporations. Proprietorships and partnerships share a common characteristic. They both place owners in the position to receive all of the profits, but at the same time, they take on all of the financial risks. LO 10.1.3 The Nature of Proprietorships The most common form of business organization is the proprietor-ship, of which there are over 23 million in the United States. A business owned and managed by one person is known as a proprietorship , or sole proprietorship , and the owner-manager is the proprietor . In addi-tion to owning and managing the business, the proprietor often per-forms the day-to-day management tasks that make a business successful, with the help of hired employees. Under the proprietorship form of organization, the owner provides expertise, money, and management. For assuming these respon-sibilities, the owner is entitled to all profits earned by the business. If no debts are owed, a proprietor has full claim to the assets , or property owned by the business. If the proprietor has business debts, however, creditors have first claim against the assets. A creditor is a person or business to which money is owed. Figure 10-1 shows a simple financial statement for Jennifer York, who is the proprietor of a small retail grocery store and fruit market. This financial statement, known as a statement of financial position or bal-ance sheet, indicates that the assets of the business are valued at $218,400. Because York has liabilities (money owed by a business) amounting to $14,400, the balance sheet shows her capital as $204,000 ($218,400 − $14,400). In accounting, the terms capital , net worth , and owner’s equity are interchangeable and are defined as assets less liabilities. If there are profits, York gets the total amount. She must also absorb losses.

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  Essentials of Contemporary Business

  • Louis E. Boone, David L. Kurtz(Authors)
  • 2013(Publication Date)
  • Wiley

    (Publisher)

  Ven- ture capitalists are firms that invest in small businesses in return for an ownership stake. Small Business Administration (SBA) principal government agency concerned with helping small U.S. firms. microloan small-business loan often used to buy equipment or operate a business. 1 2 3 4 Outline the forms of private Business Ownership. A sole proprietorship is owned and operated by one person. Al- though sole proprietorships are easy to set up and offer great operating flexibility, the owner remains personally liable for all of the firm’s debts and legal settlements. In a partnership, two or more individuals share responsibility for owning and running the business. Partnerships are relatively easy to set up, but they do not offer protection from liability. When a business is set up as a corporation, it becomes a separate legal entity. Inves- tors receive shares of stock in the firm. Owners have no legal and financial liability beyond their individual investments. In an employee-owned business, most stockholders are also em- ployees. Family-owned businesses may be structured legally in any of these three ways but face unique challenges, including succession and complex relationships. The legal structure of a not-for-profit corporation stipulates that its goals do not include earning a profit. sole proprietorship Business Ownership in which there is no legal distinction between the sole proprietor’s status as an indi- vidual and his or her status as a business owner. partnership association of two or more persons who operate a business as co-owners by voluntary legal agreement. C corporation a form of legal organization with assets and liabilities separate from those of its owner(s). S corporation a form of business organization in which the entity does not pay corporate taxes on profits; instead, profits are distributed to shareholders, who pay individual income taxes.

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  Property in Work

  The Employment Relationship in the Anglo-American Firm

  • Wanjiru Njoya(Author)
  • 2016(Publication Date)
  • Routledge

    (Publisher)

  This has most significance in the context of insolvency, where property rules ‘partition corporate assets from the assets of individuals associated with the company’. 5 But ownership in the firm need not be understood solely in terms of specific ‘assets’. The concept of property is more concerned with the mutual rights and obligations amongst individuals with conflicting interests in the same resource than with the ownership of physical ‘things’. 6 Ownership signifies a ‘bundle of rights’, a ‘complex bundle of relations’, which includes the right to the firm’s revenues and to determine the firm’s operations and strategy. 7 It is in this sense that the concept of ownership has greatest relevance for decision-making in the firm, and for employee-participation claims. In this context ownership is often used in a normative sense, to designate a right of which the owner ought not to be deprived without his or her consent. 8 Ownership in the firm is also best understood as a qualified rather than absolute notion. Here the importance of the normative, as opposed to descriptive, notion of ownership is highlighted by the fact that in the large publicly-held firm the definition of shareholders as owners is hardly descriptive of actual practice, in that the rights exercisable by the shareholders do not include the entire range of rights exercisable by any owner of property. Most shareholders understand that they do not have the same rights of access to the premises of companies in which they own shares as they do in their own homes. 9 As Waldron remarks in referring to the description of shareholders as owners of the company, ‘of course, they do not have all the rights of ownership on, say, Honoré’s list, but then neither does a landlord or a mortgagor’. 10 This point may also be illustrated by the description of shareholders in law and economics

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  Contemporary Business

  • Louis E. Boone, David L. Kurtz, Brahm Canzer(Authors)
  • 2021(Publication Date)
  • Wiley

    (Publisher)

  Although far fewer firms are organized as corporations, the rev- enues earned by these companies represent over 80% of revenues earned by U.S. businesses each year. Each legal structure offers unique advantages and disadvantages. But because there is no universal formula for every situation, some business owners prefer to organize their 134 CHAPTER 5 Small Business and the Legal Forms of Business Ownership companies further as S corporations, limited-liability partnerships, and limited-liability companies. In some cases, corporations are owned by their employees. In addition to the three main legal structures, several other options for ownership exist. These include employee-owned businesses, family- owned businesses, and not-for-profit organizations. Sole Proprietorships The most common form of Business Ownership, the sole proprietorship is also the oldest and the simplest. In a sole proprietorship, no legal distinction separates the sole proprietor’s status as an individual from his or her status as a business owner. Although sole proprietorships are common in a variety of industries, they are concentrated primar- ily among small businesses such as repair shops, small retail stores, and service providers such as plumbers, hair stylists, and photog- raphers. The term solopreneur refers to an entrepreneur who works alone, “solo,” and runs his or her business single-handedly without any employees. Sole proprietorships offer some unique advantages. Because such businesses involve a single owner, they are easy to form and dissolve. A sole proprietorship gives the owner maximum management flexibil- ity, along with the right to all profits after payment of business-related bills and taxes. A highly motivated owner of a sole proprietorship directly reaps the benefits of his or her hard work. Minimal legal requirements simplify entering and exiting a sole proprietorship.

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  Patterns of Entrepreneurship Management

  • Jack M. Kaplan, Jack McGourty(Authors)
  • 2020(Publication Date)
  • Wiley

    (Publisher)

  Identifying What Form of Ownership Is Best In choosing a form of ownership, entrepreneurs must remember that there is no single “best” form; what is best depends on the individual’s circumstances. To determine the form of owner- ship, be prepared to address the following issues: 3 • How big can this business potentially become? • How much control do you need in the decision-making process of the company? Are you wil- ling to share ideas and the business’s potential profits with others who can help build a more successful business? • How much capital is needed to start the business? • What tax considerations are important? What sources of income are there, and how are they to be sheltered? • In case of failure, to what extent are you willing to be personally responsible for debts created by the business? • Is it important that the business continues in case of owner incapacity or death? • Who will be the sole or major beneficiary of the business success? Is the owner the type of person who doesn’t mind taking all the risks but expects to reap all the benefits if successful? • Can you put up with the time-consuming bureaucratic red tape associated with more com- plicated forms of ownership? What is your emotional reaction to government regulations and their accompanying paperwork requirements? Forms of Doing Business The legal form of business (sole proprietorship, C-corporation, S-corporation, partnership, or LLC) should be carefully considered to ensure that the form chosen best meets the short- and long-term requirements as well as the significant tax and nontax differences. A brief analysis of each form is presented. Because there are significant tax and nontax differences among the forms, the results and requirements of each form should be carefully considered to ensure that the business form chosen best meets the requirements.

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  The Law (in Plain English) for Photographers

  • Leonard D. DuBoff, Sarah J. Tugman(Authors)
  • 2020(Publication Date)
  • Allworth

    (Publisher)

  limited liability company , and a few hybrids. Once the business form has been selected, there are organizational details, such as partnership agreements, operating agreements, or corporate papers to complete. These documents define the day-to-day operations of a business and, therefore, must be tailored to individual situations.

  An explanation of some of the features of these various business organizations, including their advantages and disadvantages, follows. This book cannot, and does not, include complete coverage of all of the pertinent details about business structures and their pros and cons. Each person’s personal circumstances are different and require consideration of individually relevant factors. As previously suggested, you should consult an attorney and an accountant before deciding to adopt any particular structure. This discussion is meant to facilitate your communication with your lawyer and to enable you to generally understand the choices available.

  THE AMERICAN DREAM: SOLE PROPRIETORSHIP

  The technical name sole proprietorship may be unfamiliar to you, but you may be operating under this business form right now. A sole proprietorship is an unincorporated business owned by one person. Although not peculiar to the United States, it was, and still is, the backbone of the American dream. Legal requirements are few and simple. In many localities, professionals such as photographers are not required to have occupational licenses, while a business license is often required. If you wish to operate the business under a name other than your own, the name must be registered with the state or, in some cases, the county in which you are doing business.

  There are many financial risks involved in operating your business as a sole proprietor. If you recognize any of these dangers as a real threat, you probably should consider an alternative form of organization. If you are the sole proprietor of a business, the property you personally own is at stake. In other words, if for any reason you owe more than the dollar value of your business, your creditors can force a sale of much of your other personal property to satisfy the debt. Thus, if one of your photographs is defamatory, an invasion of someone’s privacy, or infringes someone else’s copyright, you could find that you are personally responsible for paying any judgment entered against you.

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  No longer available |Learn more

  Introduction to Business

  • (Author)
  • 2014(Publication Date)
  • Learning Press

    (Publisher)

  ____________________ WORLD TECHNOLOGIES ____________________ Chapter- 2 Basic Form of Ownership Sole proprietorship A sole proprietorship , also known as a sole trader or simply a proprietorship is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner (subject to taxation specific to the business). Every asset of the business is owned by the proprietor and all debts of the business are the proprietors'. This means that the owner has no lesser liability than if they were acting as individual instead of a business. It is a sole proprietorship in contrast with partnerships. A sole proprietor may do business with a trade name other than his or her legal name. Sometimes a sole proprietor is required to file a doing business as statement with a local government even if it is the same as his actual name for certain types of businesses or as a requirement to open a business banking account. Advantages The many advantages of Corporations are described in that article; chiefly they are the ability to raise capital either publicly and privately, to limit the personal liability of the officers and managers, and to limit risk to investors. The disadvantages of corporations are advantages to proprietorship: reduced cost of doing business, as corporations must do many things like purchasing, accounting, and legal actions in more expensive ways and are subject to special taxes and fees; easier and cheaper to start and discontinue without required fees and legal expenses; and easier management, particularly when a sole owner wishes to have exclusive control, as most corporations are required to be controlled by a board of several persons. ____________________ WORLD TECHNOLOGIES ____________________ Lending Holding everything else constant, ...

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  Managers and the Legal Environment

  Strategies for Business

  • Constance E. Bagley(Author)
  • 2018(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  In other words, the sole proprietor is the business. Any individ-ual who conducts business without creating a separate organization is operating as a sole proprietorship. There are no formal requirements for forming a sole proprietorship. If, however, the business operates under C H A P T E R 19 C h a p t e r O v e r v i e w This chapter begins with an examination of the advantages and disadvantages of the most frequently used forms of business enterprises: sole proprietorships, general and lim-ited partnerships, limited liability partnerships, master limited partnerships, corporations (including S corporations), and limited liability companies, as well as two vehicles for socially motivated firms, the benefit corporation and the low-profit limited liability company. Next, the chapter summarizes the basic tax treatment of these different entities. The remain-der of the chapter offers a more detailed discussion of how partnerships and corporations are structured and operated. Chapter 20 discusses the fiduciary duties of corporate offi-cers, directors, and controlling shareholders and how power is allocated between the shareholders and the directors of a corporation in contests for corporate control. Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 19 Forms of Business Organizations 593 a fictitious business name —that is, a name other than the name of the owner—then that name must be registered with the state. A sole proprietorship terminates on the dis-continuation of the business or the death of the proprietor, whichever is earlier.

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  An Entrepreneurial Approach to Stewardship Accountability

  Corporate Residual and Global Poverty

  • Raymond W Y Kao, Kenneth R Kao;Rowland R Kao;;(Authors)
  • 2004(Publication Date)
  • WSPC

    (Publisher)

  3.1. What is Ownership? Ownership is the strongest motivation for human action. On a grand scale, war is about ownership, be it ownership of oil, space for colonization, or the governance of a people. The downfall of socialism largely occurred because socialism (at least as practiced by the Soviet bloc) overlooked the power of individual’s right to property ownership. On an individual scale, desire for ownership has resulted in the creation of giant corporations, caused any num-ber of young men to do ridiculous things in front of young women, resulted in vandalism and assault, and been the root cause of many other actions. For humans, the right to own is an intrinsic part of our reality. However, we may ask ourselves — what is ownership? For the purposes of this book, ownership will be viewed as the right of the individual or a group of individuals to make proprietary decisions and to act upon them, gov-erning or controlling resources (including human resources) for the pur-pose of satisfying one’s needs or desires. Ownership is essential for proprietary decision-making, and can be claimed legally, or by fiat (conquest being the most obvious form of the latter, but also including such measures as theft, squatting on land, etc.). At its heart ownership is a simple matter, but we make it complicated. “Ownership” and profit (which presupposes ownership) are the founda-tion of the western style market economy. They dominate much of human economic history and are at the root of much of human motivation. The evolution of the rights of private property ownership is long. Ownership is not restricted to humans, but exists in other species as well. Many animals are territorial. In chimpanzees, the famous anthropologist Jane Goodall has even witnessed murder and tribal warfare (though perhaps this only means that we need to extend our definition of what is human).

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  The Small Business Planner

  The Complete Entrepreneurial Guide to Starting and Operating a Successful Small Business

  • Larry Wilson(Author)
  • 2020(Publication Date)
  • Morgan James Publishing

    (Publisher)

  Partners have a similar role as the sole proprietor and share the risk. The exception to this rule is a limited partnership where certain individual liability is reduced or eliminated. In some jurisdictions, there are significant legal implications to operating a partnership, which should be discussed with a lawyer along with the partnership agreement. The primary reasons to take a partner into a business would be the input of additional capital or expertise in an area of administration or operations that is otherwise absent. Many partnerships fail because both individuals have similar skills and experience. If one has a production background and the other a sales background, harmony is more likely to endure. A partnership agreement is a must in case one partner fails to fulfill their obligations, dies or wishes to buy the other partner out. There should be exit mechanisms built into the agreement in the event that the partnership does not work out and the partners decide to go their separate ways.

  Corporation – is the most expensive and complex business format to set up, however, it has many advantages that should be considered. The word company usually signifies that you are referring to a corporation. In addition to your own tax return, there is also a requirement that the incorporated company submit a return to one or more levels of government. Your tax accountant will look after year end returns from the set of books you provide. Your lawyer can register your corporation if you decide it is the right way to go and in some jurisdictions this can be done on-line.

  • A corporation is an entity that can purchase and own property including land, vehicles, equipment and other businesses. • It is owned by the shareholders. • It is operated by the directors. • Liability is limited. • A corporation can sue or be sued. • This form of business registration offers more expense write offs and greater flexibility in owner remuneration.

  A corporation is owned by one or more shareholders. In a simple set up, you could be the only shareholder and issue yourself ten or one hundred shares for a nominal price. This may become the first deposit in your new business bank account. If you have a partner or investors, a certain percentage of shares can be issued depending upon their investment and level of ownership. As with a partnership, you should have a written shareholder agreement drafted by your lawyer if there are other owners. This can give you a first option to purchase their shares if they decide to leave or if they die, and an exit mechanism for a final division of corporate property in the event of a breakdown in relations between shareholders. The corporation’s operations are managed by the directors and administered by the officers; president, vice president, treasurer and secretary. In a very simple single owner corporation you may be the only shareholder, sole director and the president. Speak with your accountant about assigning someone the title of treasurer for the purpose of having a second signature for the company bank account.

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  From Kitchen to Consumer

  The Entrepreneur's Guide to Commercial Food Preparation

  • Bozzano G Luisa(Author)
  • 2012(Publication Date)
  • Academic Press

    (Publisher)

  The food processor who starts out as a sole proprietor may, at some point, lack sufficient capital. This is not always a bad sign. Often extra dollars are needed to launch into a major new market. You may eventually seek a partner with available funds and comple-mentary skills. Further down the road, if all goes well, you and 36 Φίαηηίηβ your business your partner may decide to incorporate. All three forms of busi-ness ownership are open to you. The following is an explanation, in very general terms, of some of the things you will need to know about starting your business. Please be aware, however, that no one expects you to do this alone. Be smart. Get help. There is all manner of expert, professional help available, often at little or no cost. Talk to your banker. Contact your local college or university to find out what kind of services they have to offer. Educate thyself! A list of state and federal organizations just waiting to help you appears at the end of this volume (see Appendices A, B, and C). So let's get started. This is your synopsis of Business 101. Sole Proprietorship When one person finances a business using only his or her cash (and possibly loans) the business is legally called a sole propri-etorship. (Entrepreneurs love this one because they get to be totally in charge—but, they also get to have all the problems.) The sole proprietor makes or breaks the business which, as I mentioned, may sound singularly appealing to those instilled with the red-blooded American entrepreneurial spirit. It is dif-ficult, however, to go it alone. The sole proprietor has sole con-trol and sole responsibility. This person must provide or procure all the capital necessary to operate the business and is person-ally liable for all claims against the business. On the positive side, the sole proprietorship is easy to initi-ate and is the least regulated form of business. The major advantage of the sole proprietorship is its simplicity.

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