Ownership Flashcards
Factors that must be considered when choosing a form of ownership
Legal person Continuity Liability Ownership Tax implications Legal requirements Capacity
Legal person
The legal right of a person or business to own property enter into contracts and sue or be sued
Continuity
The ability of the business to continue after the death or retirement of the owner or more than one of the owners
Liability
The responsibility of the owner for the debts of the business
Limited liability
. They wont lose their personal assets
Unlimited liability
The owners may lose their personal assets if the business is declared insolvent
Ownership
Impacts the management functions
The level of control that the owner wishes to have
Tax implications
Businesses should consider tax laws because some businesses are taxed more than others.
These fluctuations affect the amount of tax a company pays to the government
Legal requirements
Legislation for starting a business
The establishment costs and time before a business can legally do business
Capacity
The ability of management to start and operate a business as planned
The ability to expand by adding owners
Define different forms of ownership
The type of businesses selected by the business owner
Difference between profit and non-profit organisations
Profit Organizations
The objective is to make a profit for the owner
Capital contributed by the owners
Responsible for paying tax
Non-profit Organizations
The objective is to promote a social cause
Funds from donation and government grants are the main source of capital
Form of ownership (PROFIT)
Sole proprietor Partnership Close corporation Private company Public company Personal liability company Cooperatives
Form of ownership (NON-PROFIT)
A non-profit company
NPC
