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Business ownership and global business. - Essay Example
A vital feature of a corporation is that it is a limited liability entity. In case of bankruptcy or other legal obligations, shareholders are only liable to pay the amount of their share or risk to lose it. Another one is…
All the three forms of companies have their own benefits and risks. However sole proprietorship appears to be more risky as the owner is totally liable for every debt or loss incurred by the company.
Limited Liability Company has some characteristics of sole trader and some of corporations as it is a limited liability company but a flow-through entity which means not subject to taxation up to some extent. Usually single owners choose this type of company to get rid of tedious paperwork required in other forms of companies.
I think co-operative structure will be appropriate for this organization as it will help them to bring a wider platform in terms of financing and other resources. It also brings more knowledge and expertise to the organization.
The company is totally run by the owner by his own self with out any other partner or director so in this form of business, the owner is not only limited in terms of ideas and knowledge but also monetary resources. The owner should think to delegate some powers and duties by getting other stakeholders in the company to extend the scope of business. A Limited liability company can also be limited in terms of financing sources.
The owner, if not willing to change the ownership structure, opt to open branches of his business in other cities by replicating the same operations administered by local branch managers. He may choose to outsource some of the operations to other companies to get expert output.
Tariffs and duties may affect the global business negatively. Higher rates of custom duties and taxes usually discourage buyers to import from other countries and they prefer to buy locally. The governments may take measures of decreasing such tariffs in order to encourage global ...