They enlisted the help of a third co-founder Ronald Wayne and began selling the Apple 1. With their profits they improved and refined their design and launched Apple 2 in A private company, Pty Ltd or proprietary limited company is treated as a seperate legal entity. So even if you launch your business single-handedly, this type of business is registered as a separate legal entity.
Although there are a fair amount of benefits, there are also drawbacks to structuring your business as a Proprietary limited company, such as:. Although he started out as a sole proprietor and eventually launched as a public company, he ultimately chose to run a private company. Here is an example of a private company:. After several years of hustling, in , Richard Branson started a mail-order record company. It made enough money for him to expand and open a discounted record store.
He then launched a successful record label, as well as expanding into industries such as trains, mobile phones, banking, bridal wear and gyms and an airline. A public company is a business that issues securities through an initial public offering IPO and trades its stock on at least one stock exchange.
Publicly traded companies are defined as public because, unlike Pty Ltd businesses, shareholders can be anyone who purchases stock. Anyone can then become equity owners of the business. Just like any other type of business structure, a public company has benefits , such as:. Related: Go Public or Stay Private? Many internationally recognisable businesses started out as a partnership, this business is no different. Today it is one of many publicly traded companies on the New York Stock Exchange.
Facebook has since become the largest social network in the world, with 2. In , Facebook filed to become a public company. A franchise is when the owner of a business licenses their business to a third party. For more advantages visit here. The board of directors elected from the stockholders, controls the activities and direction of the corporation.
In addition to these basic forms of business ownership, these are some other types of organizations that are common today:. A cooperative is a business organization owned by a group of individuals and is operated for their mutual benefit. The persons making up the group are called members. Cooperatives may be incorporated or unincorporated. Some examples of cooperatives are: utility cooperatives water and electricity , cooperative banking, credit unions, and housing cooperatives.
Limited liability companies LLCs in the USA, are hybrid forms of business that have characteristics of both a corporation and a partnership or sole proprietorship. An LLC is easier to establish. It is not incorporated; hence, it is not considered a corporation. An LLC may choose to be taxed like a sole proprietorship or partnership flow-through taxation, where the company is not taxed and income is only taxed in the owners' tax returns or like a corporation.
By default, an LLC is taxed through flow-through taxation. An "S Corporation" is not really a type or form of business entity, rather it is a tax classification in the US. This classification allows income to pass-through to the owners like in a partnership. Banks often want to review the partnership agreement before lending the business money.
The standard partnership agreement will likely include the following information: 1 Name of the partnership 2 Purpose of the business 3 Location of the business 4 Duration of the partnership 5 Names of the partners and their legal addresses 6 Contributions of each partner to the business, at the creation of the partnership and later. Notably, most partnerships are usually formed by professionals and those that engage in service oriented business concerns.
Limited partnership is one in which certain partners are liable only for the amount of their investment. This is a special kind of partnership governed by partnership Act of The purpose of a limited partnership is to allow one or more individuals to provide capital on which a return is expected.
This newer type of partnership was created to limit the disadvantage of unlimited liability. Partners may be classified on the basis of liability, degree of management participation in management share in the profit and so on. The following types of partners are organized 1 General partner: A general partner is an owner partner who has unlimited liability and is active in managing the firm.
They merely lend their names to the enterprise and may be liable for certain debt of the partnership. However, most do not. There are possibilities that problems may occur when the entrepreneur realizes he or she is not in charge of his or her own company.
Even when partnerships work, there are always fears that the partners will develop different business goals. Partners may dissolve or terminate the partnership. Thus dissolution occurs when a general partner ceases to be associated with the business. Impropriety or improper behaviour of any general partner that reflects negatively on the business. Adapted from Scarborough et al pg Termination on the other hand is the final act of intentionally closing the partnership as a business.
This can occur after the partners have agreed to cease operations and all affairs of the partnership have been concluded. Each country has a body of laws that guide the registration and operations of companies.
It also specifies the category of people that can come together to form a company. A company is said to be limited by shares, if the liability of its members limited by the memorandum to the amount, if any unpaid on the shares respectively held by them.
A company is said to be unlimited when the members do not have any limit on the liability of its members. The total number of members of a private company shall not exceed fifty, not including persons who are bonafide in the employment of the company or were while in that employment and have continued after the determination of that employment to be, members of the company.
The articles of the private company must restrict the transfer of its shares, i. The public liability company is a company where the shareholders are members of the public. The shares are generally freely transferable.
Public companies are large trading concerns with minimum membership of two but no maximum. They can take the form of private or public companies. Each involves a different approach to dealing with profits and losses Figure 9. There are three basic forms of business. A sole proprietorship A firm that is owned by one person. From a legal perspective, the firm and its owner are considered one and the same.
On the plus side, this means that all profits are the property of the owner after taxes are paid, of course. This presents a tremendous risk. If a sole proprietor is on the losing end of a significant lawsuit, for example, the owner could find his personal assets forfeited. Most sole proprietorships are small and many have no employees.
In most towns, for example, there are a number of self-employed repair people, plumbers, and electricians who work alone on home repair jobs. Also, many sole proprietors run their businesses from their homes to avoid expenses associated with operating an office. In a partnership A legal form of business wherein two or more partners share ownership of a firm.
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