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Unit1 Companies

Group 1 : PHAL OUDOMPHOLPHAN KIMHOUTTO PHENGLYYEN MAKARANHAR VONGSO BUNLONG

INTRODUCTION TO BUSINESS CONCEPTS

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1.Basic Forms of Business Ownership

There are three forms of Business Ownership :

So

le

P

rop

riet

or

sh

ips

Partnerships

Corporations

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1.1-Sole Proprietorships

1.Decisions are made by only the owner

2.All earnings go to the sole proprietor

3.Easy Organization Establishing

4.Complete control

5.pride of ownership

6.Lower taxes

A business owned by a single owner.

1.1.1 Advantages

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1.The sole proprietor incurs all lose

2.unlimited liability

3.limited life of business

4.difficult to raise capital for business

5.risk of lost is not shared

6.Limited Fund

7.Limited skills  

.

1.1.2 disadvantages

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1.2 PartnershipPartnership : A business that is co-ownedby two or more people.Partner: Co-owners owners of the business

Advantages• Addition Funding

• Losses are shared

• More specialization

Disadvantages• Control Is shared

• Unlimited Liability

• Profit are shared

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1.3 Corporation

More money for investment Limited liability Size Perpetual life Ease of ownership change Ease of drawing talented employees Separation of ownership from management

.

1.3.1 Advantages

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Initial cost  Extensive paperwork Two tax returns Size  Difficulty of termination Double taxation

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1.3.2 Disadvantages

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+ S Corporation

Eliminating double taxation 

Protection from liability 

More room for investors

An S Corporation is a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnership.1.4.1 Advantages

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Rule and fees are strict 

Have only one class of outstanding stock

not have more than 25 % of income

derived from passive sources 

1.4.2 Disadvantages

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3. Franchise

Management and marketing assistance.

Personal ownership.

Nationally recognized name.

Financial advice and assistance.

Is a right to buy brand name, services, and product to bring in own country for sell within the law.

3.1. Advantages

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3.2. Disadvantages

Large start-up costs.

Shared profit.

Management regulation.

No freedom

Restrictions on selling.

Fraudulent franchisors.

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