Business Types and Forms

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Forms and type of Business

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Types of Business and Forms of Business Ownership By: Abid Istwani, Ayaan Mohammed

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Forms and type of Business

luonut Mustafa Mustafa - Rick Hansen SS (2542)

Business Types and Forms

Non-Profit

Not making or conducted primarily to make a profit.

Creating a nonprofit organization takes time, effort, and money. Fees are required to apply for incorporation and tax exemption. The use of an attorney, accountant, or other consultant may also be necessary.

Organizations that qualify as public charities are eligible for federal exemption from payment of corporate income tax. Once exempt from this tax, the nonprofit will usually be exempt from similar state and local taxes.

E-Commerce

Buying and selling of goods or services using the internet.

Some consumers value the personal touch they get from visiting a physical store and interacting with sales associates. Such personal touch is particularly important for businesses selling high-end products as customers not only want to buy the merchandise but also have a great experience during the process. Scams are another disadvantage of e-commerce.

eCommerce allows you to reach customers all over the country and around the world. Your customers can make a purchase anywhere and anytime, especially more people are getting used to shopping on their mobile devices. Merchants can only provide a limited amount of information on a product in a physical store. On the other hand, eCommerce websites allow the space to include more information such as demo videos, reviews, and customer testimonials to help increase conversion.

Manufacturing

The process of converting raw materials, components, or parts into finished goods

Global warming is a large concern for many individuals around the globe - with manufacturing being a substantial contributor to it.

They reduce the costs of operation because their ability to adapt to changes helps to prevent defective products as well as wasted time and resources.

Merchandising

Co-operative

A business that is run and owned equally by all members who share all their profits

The members have less operational control. There is fixed pricing. Since their is less profit for everyone, there is usually a lack of interest in their work

The costs are lower because marketing costs money. There is limited liability and the shareholders are only liable up to the amount that they invested . If the business is runned strategically, they could have a large marketing budget.

Franchise

A business opportunity that allows the franchisee to a start their own business by using their expertise and ideas

You dont need business experience to run a franchise. Small businesses are supported by big business networks . Franchise have a higher rate of success than start-up businesses

You dont need business experience to run a franchise. Small businesses are supported by big business networks. Franchise have a higher rate of success than start-up businesses

Corporation

A company or a group of people legally recognized as one entity.

The corporation pays taxes on its own income and shareholders have to pay taxes on any dividends received so there is double taxation

The company’s shareholders are not involved in any kinds of debts or judgements handed down against the corporation

Partnership

An association of two or more people as partners.

The members of partnership are exposed to unlimited liability. It is hard to withdraw any funds from the business. There could be conflict between the partners because each have their own thoughts and creative ideas.

Business is easier to set-up and start-up costs are low and more capital is available for business. Great borrowing capacity

Main topic

Sole Proprietorship

Unincorporated business with one person or a married couple as the owner.

DISADVANTAGES

These types of businesses are easy to form and the business owners receive full share of their profits and they don't have to split them up with other people.

Service

The action of helping or doing work for someone

Difficult variation, since service businesses are harder to value than a manufacturing or retail company. Those businesses have inventory, equipment and other hard assets that have a value.

DISADVANTAGE

They are able to adapt to the changing needs of their customers much quicker than product-based companies.

ADVANTAGES