When you decide to operate a business, the first question that must be addressed is a legal form that will be taken business. There are three distinctive ways where you can run business: as single ownership, partnership, or corporation.
Single ownership is the simplest form of operating business. Only one owner is responsible for making all business decisions and, therefore, produce all profits, but also assume all risks and obligations.
Most single ownership tends to be small and localized. The advantages that are generally associated with carrying single ownership are as follows: (1) ease of starting and dissolving business; and (2) simple start up costs.
However, there are significant losses that can cause you to decide to oppose choosing this business form, that is, unlimited responsibility. The owner is personally responsible for all debts and obligations issued by business. The owner is thus responsible for fully personal assets for all liabilities and losses issued by business. Also, the owner is responsible for employee actions in their work.
Most jurisdictions require single ownership to register with the government department or authority related to trade names operating below.
The partnership is a relationship between two or more people who run a business with the intention of generating profits. This organization is usually more complex than single ownership and there are more than one owner to share in profit and / or losses.
Some individual groups choose partnerships as a way to continue the business because of the ease of formation and dissolution, and the lack of overall formality. However, such as single ownership, one of the main losses to choose partnership as a form of your business, including indefinite personal liabilities from each partner for all debts and partnership obligations. In other words, each partner is responsible for all debts issued by other partners when acting on a business trip, regardless of capital contributions from individual partners.
A company (also called the “company”) is a legal entity that has its own legal personality that is different from its owner (called shareholders) and individuals who manage and carry out their business and business (called director and officer). Corporate creation occurs after submission of appropriate establishment articles (also called charter or establishment certificates) with relevant government departments or authorities.
Every corporation consists of shareholders, directors and officers. Shareholders, as the name suggests, are the people who hold (IE, have stocks in the corporation. On the reason the sound that is usually attached to the stock, shareholders controlling the corporation. If there is only one shareholder, the person has an absolute control of the corporation. If The corporation has many shareholders, corporate control depends on who has the majority of voting stocks. However, shareholders do not directly manage corporations. They use their influence by choosing and eliminating the director and approving or approving the main company decisions.
One of the responsibilities of shareholders is to choose corporate directors, usually on an annual basis. Directors do not need to be the company’s shareholders. Directors are responsible for overseeing and managing corporate affairs, and appoint officers, who are responsible for running the corporation everyday.