企业形式.pptVIP

S.6 Economics ProjectForms of Ownership Content Private enterprises: Sole trader / Sole proprietorship Partnership – General partnership – Limited partnership Limited company Sole trader Definition: Sole trader is a private enterprise with only one owner. Sole trader – Characteristics The firm is not a legal entity / has no legal status and it cannot be separated from the owner. When the firm has legal offence, the owner will be sued on behalf of the firm. Smallest degree of specialization Limited source of fund Lower profit tax rate Sole trader – Advantages Greater autonomy and freedom / flexibility because the owner can decide everything on his own. Closer relationship with customers and it can obtain more market information. Higher privacy Sole trader – Disadvantages The owner has unlimited liabilities, when the firm shuts down, the owner’s loss is not limited to the amount he invested in the firm. He has to use his personal assets to pay the debt of the firm. The owner’s risk is higher. No division of labour Limited source of fund, the firm lacks capital for expansion. Partnership Definition: Partnership is a private enterprise with 2 to 20 partners. A partnership may consist more than 20 persons in some professional groups such as lawyers and accountants. General partnership – Characteristics The partners have shared responsibility (or called bounded responsibility). When one partner makes a decision, the other partners also need to be responsible. When one partner makes errs, all partners will also be liable to the mistake. Simple and less costly setup procedures Lower profit tax rate Limited partnership – Characteristics A partnership with at least one partner with unlimited liabilities and some partners have limited liabilities. Partners with limited liabilities are limited partners, they are protected and when the firm closes down, their loss is limited to the amount they have invested in the firm. But they cannot manage the firm. Pa