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Types Of Business
By peace | December 31, 2006
Parisian Shops-Boulangerie By David Nichols
“Business” generally comes in three forms: sole proprietorships, partnerships and companies or corporations.
1. Sole Proprietorships
Sole proprietorships have a single owner whose business and personal assets are one and the same. Sole proprietorships, which may be operated either under the name of the owner or under a business name. Except for registration with the Registry of Companies and Businesses (RCB), a sole proprietorships may be established whenever the owner decided to commence business.
2. Partnerships
Partnerships are the result of voluntary agreement between two or more persons to establish a business for profit. A partnership is a legal relationship between the owners, uniting their efforts to carry on a business. Its goal is profit for the partners, individually and collectively.
However, partnerships, like sole proprietorships, do not enjoy a separate legal existence. The death of a partner legally dissolves the partnership. The remaining partners, however, may continue in business.
3. Companies or Corporations
Corporations are a separate legal entity from their actual owners. It has an existence apart from the lives of its owners. A company is actually a separate “person” created by those seeking its special benefits.
Typically, companies are organized to carry on some commercial pursuit. If the corporation is owned by only one or a few shareholders, most or all of whom are actively engaged in the management of the business, it is generally referred to as a “public company”. There is a legal definition in the Companies Act but it need not concern us.
Generally speaking, owners of Private Company (Pte Ltd) seek to profit from the business itself as well as to control its direction. Publicly held corporations are owned by the shareholders who can be considered more as investors than business principals. They wish only to make a profit on their capital investment. These shareholders are normally employed elsewhere and not usually involved in the day-to-day activities of the business in which they have invested.
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