Business organizations can be classified into the following forms:
The sole proprietorship
The partnership
Private limited companies
Public limited companies
Co-operative associations
Public enterprises
The Sole Proprietorship
This is commonly called the one-man business. The one-man business has the following characteristics
Formation: it is easy to start
Ownership: it is owned by one person who is in charge but may have many employees.
Decision-making: He takes the major decisions. Such a decision may not be efficient
Capital: He provides the needed capital from personal savings, friends, and relations or through debt such as bank loans. Therefore the capital of the one-man business is relatively small.
Risk-bearing: The business risks are borne by the owners alone
Management: The owner is the manager, hence, its management may not be efficient and effective
Personality of the business: The law does not distinguish between the business and the owner, therefore, the business is not a separate legal personality or entity.
Liability of owner: He does not have limited liability because the failure of the business could lead to the sale of his private assets.
Owner-employees relationship: There is a cordial relationship between the owner and his employees
Ownercustomer's relationship: The relationship between the owner and the customers is cordial because he interacts with them, in most cases, directly.
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