FORMS of Basic Forms of

Business
BUSINESS OWNERSHIP Ownership
LG1
 Advantages of

SOLE PROPRIETORSHIPS Sole

Proprietorships

Advantages Disadvantages
Ease of start/end Unlimited liability
Be your own boss Limited financial
resources
Pride of ownership Management
Leave a legacy difficulty
Time commitment
Retain profit
Few fringe benefits
No special taxes Limited growth
Limited life span
MAJOR TYPES of PARTNERSHIPS Partnerships
General Partnership

All owners share in operating the business and in

assuming liability for the businesss debts.

Limited Partnership
A partnership with one or more general partners and
one or more limited partners.
 TYPES OF PARTNERS
Partnerships

LG2

General Partner
Unlimited liability and is active in managing the
firm.
Limited Partner
Invests money in the business but enjoys limited
liability.
liability for debts is limited to amount limited
partner puts into company; personal assets
not at risk.
 Partnerships
TYPES of PARTNERSHIPS LG2

Genera Limite
l d
GP
Passive
Passive
GP GP Investor
Investor
GP
GP

Passive
Investo
r
 Advantages &

PARTNERSHIPS Disadvantages
of Partnerships
LG2
Advantages Disadvantages
More financial Unlimited
resources liability
Shared
management Division of
profits
Longer survival
Disagreements
No Special among
Taxes partners
Difficult to
 PICK YOUR PARTNER WISELY
(Spotlight on Small Business)

There is no such thing as a perfect partner but

ask these questions when you try to find your
best match:
Do you share the same goals?
Do you share the same vision for the company?
What skills does he/she have? Are yours the same?
What can he/she bring to the business?
What type of decision maker is he/she?
Do you trust each other?
How does he/she problem solve?
 Private limited
company
Public limited
company
Review Only
 PROGRESS ASSESSMENT Progress
Assessment

Most people who start businesses in the Malaysia

are sole proprietors. What are the advantages
and disadvantages of sole proprietorships?

Why would unlimited liability be considered a

major drawback to sole proprietorships?
 PROGRESS ASSESSMENT Progress
Assessment

Whats the difference between a limited partner

and a general partner?

What are some of the advantages and

disadvantages of partnerships?
 PROGRESS ASSESSMENT Progress
Assessment

What are the major advantages and

disadvantages of incorporating a business?
Why are so many new businesses choosing a
limited liability company (LLC) form of ownership?