Types and Forms of Business Ownership
Sole Proprietorship
One person starts a business
Disadvantages
Unlimited liability
Difficult to raise capital
Examples
Photographer
Baker
Private tutor
Advantages
Entitled to all profits
Easy to set up
Partnership
2 or more people starting a business
Disadvantages
Difficult to raise capital
Unlimited Liability
Advantages
Easy to set up
Shared control
Medical practices
Law firms
Small shops
Corporation
A legal entity that is separate and distinct from its owners
Disadvantages
Harder to set up
Higher taxes
Examples
Microsoft
Amazon
Advantages
Tranfer ownership
Easy to raise capital
Franchise
A method of distributing products or services involving a franchisor, who establishes the brand's trade mark/trade name and a business system
Advantages
Existing customer base
Lower risk & easier to make money than starting a new business
Subtopic
Examples
Tim Hortons
Chick-Fil-A
Disadvantages
Restrictions
Limited creativity
Co-operative
A business or organization owned by & operated for the benefit of its members.
Advantages
Easy to form
Reduced taxes
Examples
UW Credit Union
Equal Exchange
Disadvantages
Limited profits
Difficult to raise funds
Service
Sell their time, skill and knowledge in order to give people services.
Advantages
Can start in any industry
Less capital to start with
Disadvantages
Hard to maintain services quality
Lack of loyal customers
Finance
Transportation
Healthcare
Delivery services
Merchandising
Resell products they brought from suppliers
Advantages
Attracts customers
Easy to pursue consumers
Disadvantages
Limits to products availability
Poor pricing and quality
Amazon
eBay
Aliexpress
Manufacturing
Create products customers want from raw materials
Advantages
Allow businesses to be creative
Create useful things for people to use in daily life
Disadvantages
Expenses
Demand on staff
Automobiles
Tailors
Furniture
E-Commerce
Makes revenue from selling products and services online
Advantages
Express buying process
Flexible for customers
Easier to communicate
Disadvantages
Possibility of fraud
Shipping cost and time
Non-profit
Raise money for the community and people
Advantages
Employee commitment
Financial benefits
Disadvantages
Dependent on donations
Social pressure
Charity
Sport clubs