3. FORMS OF BUSINESSFORMS OF BUSINESS
When we think to start a business, we mustWhen we think to start a business, we must
decide what form of business entity todecide what form of business entity to
establish…?establish…?
4. FORMS OF BUSINESSFORMS OF BUSINESS
There are three most common forms of BusinessThere are three most common forms of Business
which are ;which are ;
Sole ProprietorshipSole Proprietorship
PartnershipPartnership
CorporationCorporation
6. Sole ProprietorshipSole Proprietorship
The sole proprietorship is the simplest business form inThe sole proprietorship is the simplest business form in
which one person owns all the assets of the business, andwhich one person owns all the assets of the business, and
is personally liable for the debits.is personally liable for the debits.
This form of business does not pay tax on earnings, inThis form of business does not pay tax on earnings, in
this case tax is levied upon personal income of thethis case tax is levied upon personal income of the
owner.owner.
The person who owns and runs the business isThe person who owns and runs the business is
commonly known as a sole proprietor.commonly known as a sole proprietor.
In Sole Proprietorship, the law does not dintiniguishIn Sole Proprietorship, the law does not dintiniguish
between business and owner.between business and owner.
FORMS OF BUSINESSFORMS OF BUSINESS
8. FORMS OF BUSINESSFORMS OF BUSINESS
PARTNERSHIPPARTNERSHIP
Definition:Definition:
In a Partnership form of business, two or moreIn 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 distinguishIn Proprietorships, the law does not distinguish
between the business and its owners. But does inbetween the business and its owners. But does in
Partnership.Partnership.
According to the law, partners should have a legalAccording to the law, partners should have a legal
agreement between them.agreement between them.
9. FORMS OF BUSINESSFORMS OF BUSINESS
PARTNERSHIP (Continue…)PARTNERSHIP (Continue…)
What kind of legal agreement should be thereWhat kind of legal agreement should be there
between partners……..???between partners……..???
10. FORMS OF BUSINESSFORMS OF BUSINESS
PARTNERSHIP (Continue…)PARTNERSHIP (Continue…)
The Law urges that following legal agreements should beThe Law urges that following legal agreements should be
between partners;between partners;
Agreement that sets forth how decisions will be madeAgreement 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 resolvedAgreement that how disputes will be resolved
Agreement that how future partners will be admitted toAgreement that how future partners will be admitted to
the partnershipthe partnership
Agreement that how partners can leave businessAgreement that how partners can leave business
whenever they want.whenever they want.
Agreement that what steps will be taken to dissolve theAgreement that what steps will be taken to dissolve the
partnership when needed.partnership when needed.
11. 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 ”
13. FORMS OF BUSINESSFORMS OF BUSINESS
““ CORPORATION ”CORPORATION ”
Definition:Definition:
A corporation is an institution that is granted aA corporation is an institution that is granted a
charter recognizing it as a separate legal entitycharter recognizing it as a separate legal entity
having its own rights and liabilities distincthaving its own rights and liabilities distinct
from those of its members.from those of its members.
14. FORMS OF BUSINESSFORMS OF BUSINESS
CORPORATION (continue…)CORPORATION (continue…)
A corporation can be taxed, it can take legal actionA 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 theThe 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 notThe corporation has a life of its own and does not
dissolve when ownership changesdissolve when ownership changes
15. Chalo khatam krte hen is kisyChalo khatam krte hen is kisy
ko…..ko…..
Ary Dosto……!Ary Dosto……!
Thak tu nhn gae na…????
17. Today, we leanedToday, we leaned
““ FORMS OF BUSINESS ”FORMS OF BUSINESS ”
Which were…Which were…
1.1. Sole proprietorshipSole proprietorship
2.2. PartnershipPartnership
3.3. CorporationCorporation
That’s all….That’s all….
