Forms of Ownership and Franchising
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Chapter 4: Forms of Ownership & Franchising
Copyright 2002 Prentice Hall Publishing Company
1
Factors Affecting the Choice
n Tax considerations n Liability exposure n Start-up capital requirements n Control n Business goals n Management succession plans n Cost of formation
Chapter 4: Forms of Ownership & Franchising
Copyright 2002 Prentice Hall Publishing Company
2
Major Forms of Ownership
n Sole Proprietorship n Partnership n Corporation n S Corporation n Limited Liability Company n Joint Venture
Chapter 4: Forms of Ownership & Franchising
Copyright 2002 Prentice Hall Publishing Company
3
Advantages of the Sole Proprietorship
n Simple to create n Least costly form to begin n Profit incentive n Total decision making authority n No special legal restrictions n Easy to discontinue
Chapter 4: Forms of Ownership & Franchising
Copyright 2002 Prentice Hall Publishing Company
4
Disadvantages of the Sole Proprietorship
n Unlimited personal liability n Limited skills and capabilities n Feeling of isolation n Limited access to capital n Lack of continuity
Chapter 4: Forms of Ownership & Franchising
Copyright 2002 Prentice Hall Publishing Company
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