““FORMS OF BUSINESS”FORMS OF BUSINESS”

Today My Topic is…Today My Topic is…

FORMS OF BUSINESSFORMS OF BUSINESS

When we think to start a business, we must When we think to start a business, we must decide what form of business entity to decide what form of business entity to establish…? establish…?

FORMS OF BUSINESSFORMS OF BUSINESS

There are three most common forms of Business There are three most common forms of Business which are ;which are ;

Sole ProprietorshipSole Proprietorship Partnership Partnership CorporationCorporation

Sole Proprietorship Sole Proprietorship

Sole ProprietorshipSole Proprietorship The sole proprietorship is the simplest business form in The sole proprietorship is the simplest business form in

which one person owns all the assets of the business, and is which one person owns all the assets of the business, and is personally liable for the debits. personally liable for the debits.

This form of business does not pay tax on earnings, in this This form of business does not pay tax on earnings, in this case tax is levied upon personal income of the owner.case tax is levied upon personal income of the owner.

The person who owns and runs the business is commonly The person who owns and runs the business is commonly known as a sole proprietor.known as a sole proprietor.

In Sole Proprietorship, the law does not dintiniguish In Sole Proprietorship, the law does not dintiniguish between business and owner.between business and owner.

FORMS OF BUSINESSFORMS OF BUSINESS

“ “ PARTNERSHIP ”PARTNERSHIP ”

FORMS OF BUSINESSFORMS OF BUSINESS PARTNERSHIP PARTNERSHIP Definition: Definition: In a Partnership form of business, two or more In a Partnership form of business, two or more

people share ownership of a single business.people share ownership of a single business.

NOTE:NOTE: In Proprietorships, the law does not distinguish In Proprietorships, the law does not distinguish

between the business and its owners. But does in between the business and its owners. But does in Partnership.Partnership.

According to the law, partners should have a legal According to the law, partners should have a legal agreement between them.agreement between them.

FORMS OF BUSINESSFORMS OF BUSINESS

PARTNERSHIP (Continue…)PARTNERSHIP (Continue…)

What kind of legal agreement should be there What kind of legal agreement should be there between partners……..???between partners……..???

FORMS OF BUSINESSFORMS OF BUSINESSPARTNERSHIP (Continue…)PARTNERSHIP (Continue…)The Law urges that following legal agreements should be The Law urges that following legal agreements should be

between partners;between partners; Agreement that sets forth how decisions will be made Agreement that sets forth how decisions will be made Agreement that how profits will be sharedAgreement that how profits will be shared Agreement that how disputes will be resolved Agreement that how disputes will be resolved Agreement that how future partners will be admitted to Agreement that how future partners will be admitted to

the partnership the partnership Agreement that how partners can leave business whenever Agreement that how partners can leave business whenever

they want.they want. Agreement that what steps will be taken to dissolve the Agreement that what steps will be taken to dissolve the

partnership when needed.partnership when needed.

FORMS OF BUSINESSFORMS OF BUSINESS

And the last and Third most common form is …And the last and Third most common form is …

“ “ CORPORATION ”CORPORATION ”

““CORPORATION ”CORPORATION ”

FORMS OF BUSINESSFORMS OF BUSINESS

“ “ CORPORATION ”CORPORATION ”

Definition:Definition:A corporation is an institution that is granted a A corporation is an institution that is granted a

charter recognizing it as a separate legal entity charter recognizing it as a separate legal entity having its own rights and liabilities distinct having its own rights and liabilities distinct from those of its members.from those of its members.

FORMS OF BUSINESSFORMS OF BUSINESS

CORPORATION (continue…)CORPORATION (continue…)

A corporation can be taxed, it can take legal action A corporation can be taxed, it can take legal action against any member of corporationagainst any member of corporation

The owners of a corporation are its shareholders.The owners of a corporation are its shareholders. The shareholders elect a board of directors to run the The shareholders elect a board of directors to run the

affairs of the business.affairs of the business. The corporation has a life of its own and does not The corporation has a life of its own and does not

dissolve when ownership changesdissolve when ownership changes

Chalo khatam krte hen is kisy Chalo khatam krte hen is kisy ko…..ko…..

Ary Dosto……!Ary Dosto……!Thak tu nhn gae na…????

So,So,What we learned today…….???What we learned today…….???

Today, we leaned Today, we leaned

“ “ FORMS OF BUSINESS ”FORMS OF BUSINESS ”

Which were…Which were…1.1. Sole proprietorshipSole proprietorship2.2. PartnershipPartnership3.3. CorporationCorporation That’s all….That’s all….