Forms of Business Ownership

Aysel MuradliFiruza SafarovaSama BelyaniNigar Zeynalova

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Main forms of business ownership

Special forms of business ownership

Additional forms of business ownership

Agenda

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Forms of Business Ownership

Main forms

Sole proprietorship Partnership Corporation

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Definition A business that is

owned by one person. Most common in

retailing, service, and agriculture.

Sole Proprietorship

• Sole proprietorship

• Partnership

• Corporation

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Advantages

• Ease of Start-up and Closure

• Pride of Ownership• Retention of All Profits• Flexibility of Being

Your Own Boss• No Special Taxes

Disadvantages

• Unlimited Liability• Lack of Continuity• Lack of Money• Limited Management

Skills• Difficulty in Hiring

Employees

Sole Proprietorship

• Sole proprietorship

• Partnership

• Corporation

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Definition- A voluntary

association of two or more people to act as co-owners of business for profit

Partnership

• Sole proprietorship

• Partnership

• Corporation

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General PartnershipBoth Partners are liable for everything the

business does Limited Partnership

One or more general partners manage the business, limited partners invest money

o Master limited partnershipOwned and managed like a corporation, but often

taxed like a partnership

Types of Partnership

• Sole proprietorship

• Partnership

• Corporation

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Advantages

• Ease of Start-up• Availability of Capital

and Credit• Personal Interest• Combined Business

Skills and Knowledge• Retention of Profits• No Special Taxes

Disadvantages

• Unlimited Liability• Management

Disagreements• Lack of Continuity• Frozen Investment

Partnership

• Sole proprietorship

• Partnership

• Corporation

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Definition- An artificial person created by law, with most of the legal rights of a real person.

1. Closed CorporationStock is owned by relatively few people and is not

sold to the general public.

2. Open CorporationStock can be bought and sold by any individual.

Corporation

• Partnership

• Corporation

• Special forms

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Advantages

• Limited Liability• Ease of Raising Capital• Ease of Transfer of

Ownership• Perpetual Life• Specialized Management

Disadvantages

• Difficulty and Expense of Formation

• Government Regulation and Increased Paperwork

• Conflict within the Corporation

• Double Taxation• Lack of Secrecy

Corporation

• Partnership

• Corporation

• Special forms

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S-corporation

LLC

Not-for-profit corporation

Special Forms of Business Ownership

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S-corporation

Corporation(limited liability)

Partnership(tax)

S corporation

A corporation that is taxed as though it were a partnership.

• Main forms

• S-Corporation

• LLC

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No more than 100 stockholders There can be no nonresident-alien

stockholders All stockholders must agree to the decision

to form S-corporation

S-corporation

Double taxation

Limited liability

Restriction on the number of owners/stockholder

• Main forms

• S-Corporation

• LLC

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A form of business ownership that combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership

Limited-liability companies

Double taxation

Limited liability

Restriction on the number of owners/stockholder

• S-Corporation

• LLC

• Non profit

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A corporation organized to provide a social, educational, religious, or other service rather than to earn a profit.

Top 5 successful non profit organizations United Way Feed the Children Gifts in Kind Americares The Red Cross

Not-for profit

corporations

• LLC

• Non-profit corp.

• Additional forms

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Cooperatives

Joint venture

Syndicates

Additional Forms of Business Ownership

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A cooperative is an association of individuals or firms whose purpose is to perform some business function for its members.

In Azerbaijan, coorperatives are mainly formed in agriculture sector.

Coorperatives

• Special forms

• Coorperatives

• Joint Venture

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Joint Venture

&

• Coorperatives

• Joint Venture

• Syndicates

A joint venture is an agreement between two or more groups to form a business entity in order to achieve a specific goal or to operate for a specific period of time.

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A syndicate is a temporary association of individuals or firms organized to per-form a specific task that requires a large amount of capital. Syndicates are used most commonly to underwrite large insurance policies, loans, and investments.

Syndicates

• Coorperatives

• Joint Venture

• Syndicates

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Thank you for attention