Ownership Is The Best Type Of Ownership Essay example

1059 Words Sep 4th, 2014 5 Pages
When people set out to start a company, they do not realize that one of the biggest decisions that they will have to make is the one of the first, assuming that the product has been chosen. Not selecting the best type of ownership can have consequences for the owner as well as for the business itself. The types of ownership will change the cost the ease in which the company is set up, how liable the owners are, what happens when there is a death or withdrawal of an owner, the environment of management control, the ease of raising more capital and the income tax related with the businesses earnings/losses. The simplest form of ownership is the Sole Proprietorship (SP), it is an unincorporated business operated by the owner in their single ability. There are some cases where the SP has other employees. The major advantage of a SP is the fact that is so simple to set up. The nice thing for working for yourself is that you are your own boss you make your on schedule. All the money that is made is owners and only the owners. When you succeed, you feel a sense of accomplishment, on the other side to that if your business fails the own takes the blame for that failure (Pride et al., 2010).
The blame for that failure is the most oblivious disadvantage; the most important one is the SP is not a separate legal body. Looking at a SP in legal terms, the business has no presence separately from its owner. The owner has complete control over the management of the business, and the assets…

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