2. TYPES OF BUSINESS OWNERSHIP
Who is your boss?
Who is your boss’s boss?
Can you become part owner?
Forms of business ownership and type of
business help describe how the business is
organized and run.
3. 4 TYPES OF OWNERSHIP
1. Sole Proprietorship
2. Partnership
3. Corporation
4. Co-operative
4. 1. SOLE PROPRIETORSHIP
Owned by one person, who performs most roles
and owns everything
Owner gets all profits, takes all the losses → called
unlimited liability
Easiest and least expensive to set up
Easiest for tax purposes → income recorded under
personal income
5. 1. SOLE PROPRIETORSHIP
ADVANTAGES
owner makes all the decisions- hours of
business, whom to hire
they are their own boss
any profits belong to the owner
6. 1. SOLE PROPRIETORSHIP
DISADVANTAGES
the owner may lack the ability to buy the right
supplies, do accounting etc
it the business loses money, so does the
owner
creditors can claim the personal belongings
of the owner
long hours
if the owner is ill the business doesn’t open
7. 2. PARTNERSHIPS
Two or more individuals share costs and
responsibilities
Terms of partnership recorded in partnership
agreement
“silent” partners- partners that usually will front a
lot of capital, but do not want to participate in
business decisions – receive profits in return
8. 2. PARTNERSHIPS
Two types of Partnerships can exist in a business:
General partnership
All partners have unlimited liability (can be
held responsible for the other partner’s
business related debts)
Limited partnership
Partners have limited liability (only
responsible for their share)
9. 2. PARTNERSHIPS
ADVANTAGES
two or more people share decision making
process
one person may be better at one task than the
other partner
sometimes easier to borrow money if two
people are involved
11. 3. CORPORATION
Business with a legal status
Can be as small as one person, or
multinational
Some owned by individuals, families, small
groups
12. 3. CORPORATION
Ownership often broken into small units, shares,
which are sold through a stock exchange
(ie. TSX) → a publicly traded corporation
Those who buy: shareholders
13. 3. CORPORATIONS
Since there are many owners, a board of
directors runs corp.
Shareholders have limited liability, not
responsible for debts
Get profits as dividends
14. 3. CORPORATION TYPES
1.
Private Corporation
Only a few people control stock
Not publicly traded
2.
Public Corporation
Sell shares to raise money
1 share = 1 vote;
3.
those with most shares influence company decisions (usually orig. owner, execs)
Crown Corporation
Business owned by the federal or provincial government
Federal: VIA Rail, Canada Post, Bank of Canada
Provincial: BC Transit, BC Lottery, BC Hydro, BC Museum
15. 4. COOPERATIVES
Business owned by workers/those who use it
Run by board of directors
Each member only gets 1 vote
Profits shared based on use
Examples:
Peninsula Co-op, Mountain Equipment Coop (MEC)
16. FRANCHISE
A franchisor licenses the rights to the business
to a franchisee for a fee
Franchisee runs business according to
agreement
Franchisee also pays monthly fee, has to
purchase product through franchiser,
sometimes gets trained by franchiser, has to
maintain uniform quality etc.
Examples: Tim Hortons, McDonalds, M&M
Meats, Boston Pizza, UPS Store