Types of Businesses and
Forms of Business Ownership
Businesses can be structured in various forms, each with its unique advantages and disadvantages. Cooperatives are owned and managed by the consumers of their products, offering benefits like shared profits and easy ownership, but they may suffer from lack of participation and potential corruption.
Types of Businesses and
Forms of Business Ownership
E-commerce
Any online store
Netflix
Ebay
Customer Loyalty is not always guaranteed
Hackers
Product quality
Easy to start and manage business
Anyone can reach the store
More convenient for customers
Always available 24/7
E-commerce is the transfer or transaction of products through an electronic store
Manufacturing
Lush
Nike
Adidas
A lot of competition
Location
Costly to Start business
Adavantages
Tax Advantages
More awareness of your brand/product
More ways to earn a profit
A business that uses any raw materials, components or parts to assemble finished goods
Merchandising
Toys-R-Us
Lowe's
Home Depot
Micheals
Expenses
Reputation
Higher Demands on Staff
Attractive Space
Increased Sales
Businesses that buy certain products
and resell those goods for a profit
Non-Profit
World Wildlife Fund (WWF)
The Nature Conservancy
Salvation Army
Hard to get funded
Volunteers
Tax-Exempt Status on Net Income
Personal Liability Protection
More Credibility
A tax-exempt organization formed for religious, charitable, literary, artistic, scientific, or educational purposes
Service
Disadvantage
Advantage
Subtopic
Service businesses are businesses that provide an activity or preform a certain task for commercial purposes
Partnership
Google (Larry Page, Sergey Brin)
Apple ( Steve Jobs, Steve Wozniak)
Microsoft (Bill Gates and Paul Allens)
Affordability
Unfair Delegation of Work
Personal Relationship
Easy Taxation
Shared Responsibility
Limited Partnerships
Flexibility
Two or more people agree to form a legal relationship to run a business. Each of the partners has to invest in the business and each profits from it or they share the debt equally
Sole
Proprietorship
One person is single-handedly responsible for the business and is legally tied to it
Freelance Artists
Independent Contractors
Hairdressers
Nail Salons
Stress
No long-term value
Personal Debts
Simplified Tax Reporting
Mixing of Assets
Full Control
Less Formalities
Franchise
A large company allows individuals to open up businesses in the name of the franchise. The franchisee operates the business, while they pay the franchisor for the right to use the name The franchisee can use the franchisor's business models and ideas contractually.
Subway
KFC
Popeyes
Standard Checks
Company Restrictions
No Room for Creativity
Independence
High Success Rate (90%)
Brand Recognition
Company Support
Easier Financing
Cooperative
Farmers
Amul
Sunkist Growers
Corruption
Lack of Participation
Owners Might Back Out
Business will suffer
Each Member Gets 1 Vote
Profits are Shared Fairly
Easy Ownership
Long-term Existence
Less Taxation
Business owned and controlled by the people that purchase the products the business produces
Corporation
Examples
Ikea
Amazon
Walmart
Disadvantages
Separate Teams
Management is Harder
Taxation is Harder
Advantages
Long-term Value
Stocks
Limited Liability
A company that is entitled by law to carry out actions while being recognized as one person in law
