Business Forms, 3rd Class of ATU-Net Entrepreneurship
Business Forms, 3rd Class of ATU-Net Entrepreneurship. Businesses, without structure, will struggle to achieve a very smoothly and effectively business that every business company seeks to achieve. Likewise, in business, this structure stems from the business ownership style. There are different forms of business ownership, all with different characteristics that make them suitable for some companies and wrong for others. In the 3rd class of ATU-Net Entrepreneurship Online Mobility Program, Cut Irna Setiawati, S.A.B., M.M., a lecturer of Telkom University shared material about “Forms of Business Ownership”. This topic is very important because it can be the basis of thinking in starting a business.
Ms. Irna, in her class, explained several types of business ownership; two of them are Sole Proprietorships and Partnerships. The sole proprietorship business ownership is the easiest form of business to start because it involves almost no requirements except for occasional business licenses and fees. Most proprietorships are ready for business as soon as they set up operations. The other advantages of a sole proprietorship business ownership form are:
- the owner will enjoy the profits of successful management,
- there’s no separate business income taxes psychological satisfaction,
- it’s easy to get out of the business.
Meanwhile, there are also disadvantages of a sole proprietorship business ownership form, include:
- owner has unlimited liability-full and personal responsibility for all losses and debts of the business,
- there’s a difficulty in raising financial capital
- the business may have to carry a large inventory, or stock of finished goods and parts in reserve,
- there’s limited managerial experience,
- it’s difficult to attract qualified employees.
- it’s limited life-firm ceases to exist when owner dies, quits, or sell the business.
The other type of business ownership is called partnership. A partnership is a business jointly owned by two or more persons. Partnerships are the least numerous form of business organization, accounting for the smallest proportion of sales and net income. Similar to a sole proprietorship, a partnership is a business ownership type which is easy to start. Since more than one owner is involved, formal legal papers called articles of partnership are usually drawn up to specify arrangements between partners. The other advantages of partnership are: 1) it’s lack of special taxes; 2) it attracts financial capital easily; 3) it’s slightly larger size and increased efficiency; 4) it’s easier to attract top talent.
However, partnership also has the disadvantages which are:
- each partner is fully responsible for the acts of all other partners,
- limited partners have limited liability,
- there’s potential for conflict among partners,
- it offers increased access to financial capital but doesn’t always work out,
- a business may have to file bankruptcy, a court-granted permission to an individual or business to cease or delay debt payments.
As an example of Partnership Business, Ms. Irna also talked a little about her own business which she created with her former students, including how it is run. The other forms of business ownership were delivered for the rest of the class interestingly. All participants were actively involved in the discussion session as well as in the game/quiz session about business ownership styles.
Don’t miss the other interesting topics of the ATU-Net Entrepreneurship Online Mobility Program. Stay tuned on September 25th, 2021 with the topic Marketing Planning for Business Start-ups.(IO)***