Popular Forms of Businesses
I am planning on starting a business but I'm unsure of which form of business to opt for. Can I be guided on the merits and demerits of some of the popular forms of business?
While the choice of which form of business to opt for comes down to your requirements and aspirations, here are the broad pros and cons of some of the forms of business.
Firstly, you can opt for the easiest business setup which is a sole proprietorship where you are the one person who will make all decisions. This is advantageous as it gives you full control of the business and it is characterised by low costs. The disadvantage is that there is no proper structure and it would be difficult to raise funds.
Secondly, you can go for a partnership firm which is easy to establish and also leads to a combination of the partners' expertise. However, there is always the possibility of disagreements, and also all members of a partnership have full liability.
Alternatively, you can go for a private limited company where there is limited liability and risk as the company acts as a separate legal entity. Transferability of shares, issue of prospectus and shares become a problem however.
There are various other forms as well such as a one-person company, cooperative society, Limited Liability Partnership and much more. You will have to choose wisely depending on what you require and expect.
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