Classification of Businesses w.r.t ownership

2. Course:Course:
IMPORT EXPORT PROCEDURE AND DOCUMENTATIONIMPORT EXPORT PROCEDURE AND DOCUMENTATION
Muhammad Idrees AsgharMuhammad Idrees AsgharFacilitator:Facilitator:
Types of BusinessTypes of Business
OwnershipsOwnerships

3. Business…!Business…!
 Sum of all activities involved in the exchange of
“GOODS” & “SERVICES”.
 A business is an organization or enterprising entity
engaged in commercial, industrial or professional
activities. A company transacts business activities
through the production of a good, offering of a service or
retailing of already manufactured products.

4.  Enterprise
 Organization
 Company
 Firm
 Entity
 Franchise
Business…!Business…!
 Venture
 Concern
 Bureau
 Conglomerate
 Group
 Industry

5. Business Associated Terms
 GOODS
 SERVICES
 CONSUMER/BUYER
 SELLER
 Market
 Products
 Money
 Needs
 Values

6. Types of Businesses

7. SOLE PROPRIETORSHIP
A business owned and managedA business owned and managed
byby one individualone individual..
The business and the owner areThe business and the owner are
one and the same in the eyesone and the same in the eyes
of the lawof the law

8. SOLEPROPRIETORSHIP
Examples
• Many restaurants
• Hair salons
• Flower shops
• Tea Stall
• Bakery
• Retail Shop
• Independent grocery stores

9. SOLE PROPRIETORSHIP
Advantages
 Simple to create
 Least costly form
 Profit incentive
 Total decision-making
 No special legal restrictions
 Easy to discontinue
 Empowered

10. SOLE PROPRIETORSHIP
Disadvantages
 Unlimited personal liability
 Limited skills and abilities
 Feelings of isolation
 Limited access to capital
 Lack of continuity of business

11. PARTNERSHIP
An association ofAn association of two or more peopletwo or more people whowho
co-own a business for the purpose ofco-own a business for the purpose of
making a profitmaking a profit

12. PARTNERSHIP
Advantages
 Easy to establish
 Complementary skills
 Flexibility and control of the business
 Ability to attract limited partners
 Larger pool of capital
 Variety of Ideas
 Taxation
 Secrecy

13. PARTNERSHIP
Disadvantages
 Unlimited liability of at least one
 Difficulty in disposing of interest
 Lack of continuity
 Potential for personality and authority conflicts
 Partners bound by law of agency
 Division of profits

14. PARTNERSHIPS
 General partnership
Involves a complete sharing in both the management
and the liability of the business
 Limited partnership
Composed of at least one general partner and at least
one limited partner (depending upon investment)

15. CORPORATION
Legal entities created by the state whose assets and
liabilities are separate from its owners..
A separate legal entity apart from its owners which
receives the right to exist from the state in which in
which it is incorporated

16. CORPORATION

17. CORPORATION
 Typically owned by many individuals and/or organizations
who own shares of the business – stock (shareholders or
stockholders)

18. CORPORATION
Advantages
 Limited liability of stockholders
 Ability to attract capital
 Ability to continue indefinitely
 Transferable ownership

19. CORPORATION
Disadvantages
 Cost and time in incorporating
 Double taxation
 Potential for diminished incentives
 Legal requirements and red tape
 Potential loss of control

20. CORPORATION
Stock
Shares of a corporation that may be bought or sold
Dividends
P-rofits of a corporation that are distributed in the form of
cash payments to stockholders.

22. THANKTHANK
YOU…YOU…
☺☺