OWNERSHIP AND STRUCTURAL FORMS OF BUSINESS ENTERPRISE

OWNERSHIP
It means the legal title to a thing or control over the thing owned, the right possession and disposal. Title to and possession of the assets of the enterprise , the power to determine the policies of the operation and the right to receive and dispose of the proceeds.

 Private Ownership

TYPES OF BUSINESS OWNERSHIP

When an enterprise is so organized that private individuals exercise and enjoy the rights and privileges of an owner in their own interest.

TYPES OF BUSINESS OWNERSHIP

Public Ownership
Controlled by political bodies as a municipal , provincial or national government or by any instrumentality created by them

 Mixed Ownership

TYPES OF BUSINESS OWNERSHIP

It exists when the elements of ownership are divided such that private persons and public bodies share in the operation of the same enterprise

FORMS OF PRIVATE OWNERSHIP

1. Individual or single or sole proprietorship 2. Partnership 3. Cooperative Organization 4. Corporation 5. Corporate combination

FACTORS INVOLVED IN BUSINESS FORMS

The nature and size of the business The capital required and the means of procuring it The length of time the enterprise is expected to operate The technical conditions affecting the enterprise The types of products to be manufactured The method and volume of production The kind of markets to be supplied and methods of marketing The competitive nature of the chosen industry.

1. SINGLE PROPRIETORSHIP
The ownership is vested in one person. This form of ownership is small, requires but little amount of capital and is readily established under the control of one man.

ADVANTAGES OF SINGLE PROPRIETORSHIP

It is easy to start and to terminate Control and management lies entirely in the hands of the owner Only a small amount of capital is required in starting Profits belong entirely to the owner High Credit Standing

DISADVANTAGES OF SINGLE PROPRIETORSHIP

Limited judgment and wisdom. Limited amount of capital Unlimited liability Difficulties of Management

2. PARTNERSHIP
The business partnership is a business relationship between two or more persons competent to make contracts for the purpose of engaging in a business activity.

 It could be as easily formed as the single proprietorship. There are more persons to conduct the business and to handle its problems. A partnership has access to greater or better credit facilities The combined ability and resources of partners are a source of strength. Retention of Valuable Employees

ADVANTAGES OF PARTNERSHIP

DISADVANTAGES OF PARTNERSHIP
Unlimited liability of partners Disagreement between partners often lead to delay and difficulties which could endanger the enterprise. Easy dissolution Frozen Investment

LIMITED PARTNERSHIP
One or more of the partners in a limited partnership must be general partners, who have unlimited liability. The limited or special partners have only limited liability, which is up to the extent of their investment.

ADVANTAGES OF LIMITED PARTNERSHIP

There is a single direction of management , thus there is unity and prompt action The limited liability of special or limited partners , serves as good inducement of investments.

DISADVANTAGES OF LIMITED PARTNERSHIP The unlimited power given to general partners may result in abuse. Possibility of collusion among partners to defraud the creditors.

KINDS OF PARTNERS
1. General Partner 2. Limited Partner 3. Capitalist partner 4. Industrial Partner 5. Managing Partner 6. Liquidating Partner 9. Ostensible Partner 10. Secret Partner 11. Silent Partner 12. Dormant Partner 13. Nominal Partner

3. COOPERATIVE ORGANIZATION
A cooperative association has some elements of a large partnership and also many features of a corporation , although it is distinct from both .

KINDS OF COOPERATIVE
The Consumers Cooperative It draws its members from the general public. This cooperative carries on retail trade operations.

4. CORPORATION
A corporation is an artificial being created by operation of law having the right of succession and the powers, attributes, and properties, expressly authorized by law or incident to its existence.

NATURE AND CHARACTERISTICS OF A CORPORATION:

1. It is an artificial business unit, and its creation is through the process of law. 2. The basic structure of a corporation is simple. 3. The corporation is of wide scope. 4. The existence of a corporation is practically permanent by operation of law. 5. The function of a corporation is public.