On the
basis of the nature of ownership, business organizations can be classified into
the following types:
Sole Proprietorship - When one individual heads a business
organization, it is said to be Sole Proprietorship. Such an organization
provides the advantage of low start-up costs and the ownership of all profits.
However, the organization has unlimited liability and limited commercial life.
Partnership - A partnership organization has two or more
individuals conducting the business together. The advantage of such an
organization is that it has access to greater amounts of capital. A partnership
business organization has similar limitations as that of Sole Proprietorship.
In addition, partnership disputes are another disadvantage of such an
organization.
Corporation - A Corporation
is a legal entity conducting business. It has numerous owners. The advantages
of such an organization are limited liability and unlimited commercial life.
However, higher organization costs and restrictions on the company are some
limitations.
