DIFFERENT LEGAL FORM OF BUSINESS OWNERSHIP

RESEARCH PAPER

MAVIC R. PAGOBO

G9 AWESOMENESS
MAVIC R. PAGOBO ENTREPRENEURSHIP

G9 AWESOMENESS

DIFFERENT LEGAL FORM OF BUSINESS OWNERSHIP

A legal form of business ownership refers to the structure through which
a business is organized and operated, determining how it's taxed, its liability,
and other aspects. Here are some common forms:

A Business Ownership refers to the legal rights and responsibilities an

individual or entity holds over a business entity. Ownership can take various
forms, each with its own implications for control, liability, and taxation , also a
Business ownership refers to the legal and financial control over a business
entity. It encompasses the rights and responsibilities of individuals or entities
who own and operate a business or company. Business owners have the
authority to make decisions, manage resources, assume risks, and enjoy the
profits or bear the losses generated by the business. Ownership can take various
forms, including sole proprietorship, partnership, corporation, or cooperative.

its legal structure is one of the owner’s most important practical decisions. Each
type of structure has its own benefits and considerations that are affected by
the business' size, the number of owners and employees, the industry, and
other variables. Each state passes its own business formation laws, and not all
states allow for every type of business structure. This means that the
requirements for forming a particular type of business vary from state to state.
 SOLE PROPREITORSHIP - A
sole proprietorship is
an unincorporated business with
one owner. As soon as you embark
on a solo side gig, freelance job, or
a new business venture, you’re
automatically a sole proprietor.
However, if you’re starting a
business with other people, you can’t be a sole proprietorship–you’ll
automatically be a general partnership instead.
A sole proprietorship, also known as a sole tradership, individual
entrepreneurship or proprietorship, is a type of enterprise owned and run
by only one person and in which there is no legal distinction between the
owner and the business entity.[1] A sole trader does not necessarily
work alone and may employ other people.[2]
The sole trader receives all profits (subject to taxation specific to the
[3]
business) and has unlimited responsibility for all losses and debts. Every
asset of the business is owned by the proprietor, and all debts of the
business are that of the proprietor; the business is not a separate legal
entity. The arrangement is a "sole" proprietorship in contrast with
a partnership, which has at least two owners.
1. Ownership: The business is entirely owned by one person who is
responsible for all aspects of its operation.
2. Liability: The owner is personally liable for all debts and obligations of the
business. This means that personal assets could be at risk if the business
incurs debts or faces legal action.
3. Decision Making: The owner has complete control and decision-making
authority over the business operations.
4. Taxation: Income from the business is typically reported on the owner's
personal tax return. This is done through a Schedule C attachment to the
owner's Form 1040.
5 EXAMPLE BUSINESS :
 MEDIA SOCIETY
 FREELANCE WRITING
 BAKERY SHOP
 CLOTHING STORE
 LANDSCAPING BUSINESS

PARTNERSHIP - A partnership is a type of

business structure where two or more
individuals or entities join together to carry on a
business for profit.
When two or more people start a business
together, they can form a partnership. There are
several types of partnerships, including general
partnerships, limited partnerships, and limited liability partnerships. In addition,
joint ventures have some aspects of partnerships. The amount of money
contributed, control exerted over the business, and legal liability vary depending
on which type of partnership is formed.
1. Multiple Owners: The business is owned by two or more individuals or
entities, known as partners. Partners contribute capital, skills, or other
resources to the partnership.
2. Shared Profits and Losses: Partners share in the profits and losses of the
business according to the terms of the partnership agreement. This
agreement outlines each partner's share of ownership, responsibilities, and
distribution of profits.
Partnerships can take different forms, including general partnerships, limited
partnerships, and limited liability partnerships , each with its own characteristics
regarding liability, management, and taxation. They are commonly chosen by
professionals, small businesses, and family-owned enterprises due to their
flexibility and ease of formation.
5 EXAMPLE BUSINESS:
 MEDICAL SERVICE
 ARCHITECTURAL FIRM
 RESTAURANTS
 ACCOUNTING FIRM
 LAW FIRM

CORPORATION - Corporations are

businesses that exist as a separate entity
from their owners. Unlike a sole
proprietorship or partnership, a corporation
is legally liable for its actions and can live on
after the death or departure of its owners.
While there are several types of corporations,
most large business entities are C corporations or C corps. This had a , Provides
limited liability , Company exists in perpetuity , Unlimited shareholders, including
foreigninvestors , Can offer more than one class of stock. And also , More
complicated to set up , , Required to have shareholder and director meetings ,
Corporate profits subject to double taxation.
1. Multiple Owners: The business is owned by two or more individuals or
entities, known as partners. Partners contribute capital, skills, or other
resources to the partnership.
2. Shared Profits and Losses: Partners share in the profits and losses of the
business according to the terms of the partnership agreement. This
agreement outlines each partner's share of ownership, responsibilities, and
distribution of profits.
3. Joint Decision-making: Partners typically have equal say in the
management and operation of the business. Major decisions are usually
made jointly, although the partnership agreement may designate specific
responsibilities to individual partners.
 4. Unlimited Liability: In a general partnership, partners have unlimited
personal liability for the debts and obligations of the business. This means
that each partner's personal assets can be used to satisfy business debts
and legal obligations.

5 EXAMPLE BUSINESS :
 MICROSOFT CORP.
 NESTLE INC.
 ABS-CBN ENTERTAINMENT
 SHELL PLC
 APPLE INC.

COOPERATIVE - A cooperative,
often referred to as a co-op, is a type of
business organization owned and
operated by a group of individuals or
entities for their mutual benefit. Here
are some key features of a cooperative
A cooperative is an association of
people, organizations or businesses designed to benefit those using its
services. A common example is a food co-op that sells food items to its
consumer members at lower prices. Similarly, farmers can form a co-op
to purchase supplies as a group and to share equipment. Members
become part of a co-op by purchasing shares, and they either pay for
the goods and services or volunteer their labor (i.e., stocking shelves at
the food co-op) in exchange for them. This also comes with , Pooled
resources , Operate to benefit members , No federal income tax.
1. Ownership and Control: A cooperative is owned and
democratically controlled by its members, who can be customers,
employees, suppliers, or other stakeholders. Each member
 typically has one vote, regardless of the number of shares they
hold or their level of investment.
2. Shared Profits and Benefits: Profits generated by the cooperative
are distributed among its members based on their participation,
contribution, or patronage. This may be in the form of dividends,
rebates, discounts, or other benefits.
3. Voluntary Membership: Membership in a cooperative is
voluntary, and individuals or entities typically join the cooperative
to access goods, services, or benefits that may not be available or
affordable otherwise.

5 EXAMPLE BUSINESS:

 ASSOCIATED PRES.
 PRODUCER’S COOPERATIVE
 FARMING SOCIETY
 HOUSING/BANKING
 MARKETING SOCIETY

REFERENCES
 https://www.forbes.com/advisor/business/types-business-ownership/
 https://www.investopedia.com/terms/s/soleproprietorship.asp
 https://www.investopedia.com/terms/p/partnership.asp
 https://corporatefinanceinstitute.com/resources/accounting/what-is-corporation-overview/\