A majority of people aspire to own their businesses or partner with their friends and families to open a business. Like in all other instances, having the right information is always an advantage especially if one is planning to venture into something which is new to them. In business, therefore, it is essential to first of all understand the options one has especially when it comes to the legal structure of ownership. Having an understanding of the forms of ownership one is allowed under the law is necessary and will help in the final decision one makes. Many people often ignore some of the simple instructions or pieces of advice they find. The results for such often include regret and run-ins with the law. Therefore, to avoid extra costs while setting up a startup, one needs to have a deep understanding of the following options of ownership:
Sole Proprietorship When people think of starting their own businesses, a majority think of venturing out on their own. At first, people prefer to walk alone and invest all their savings in an idea. When people start businesses by themselves it is called a sole proprietorship. In such a situation, a person is considered one with the business. This means that a person owns all the business’s assets as well as all the generated profits. Moreover, one is also considered responsible for all the debts and liabilities associated with the business.
People prefer sole proprietorship because they are the least expensive to start as well as organize. Additionally, one does not have to share the profits and oversees all the operations of the business. However, it is important to note that they lack limited liability which means that any losses directly affect the owner. The above means that one’s personal property could be at risk if the business defaults in payment of certain debts.
Partnerships Unlike sole proprietorships, partnerships involve instances where several people share ownership of a business. However, like sole proprietorships the business is considered one with the owners. In a partnership, there is always a written legal document that outlines how the profits and losses will be distributed, decisions will be made in the business, impasses will be resolved, and also how the business will admit other partners in the future. Partnerships tend to be a lot stronger than sole proprietorships because the losses are shared which would mean that the weight is distributed and no single person bears a heavier burden than the other.
Corporations Corporations are set up differently and unlike partnerships and sole proprietorships, they are viewed as separate entities from their owners. As witnessed in a number of occasions, corporations can be sued, enter into different contractual agreements, and they can also be taxed. Owners of a corporation are known as shareholders and the often select directors and managers who oversee the corporation on their behalf. The ownership of a corporation changes from time to time without affecting the state or workings of a corporation.
Limited Liability Company Though previously non-existent, a Limited Liability Company combines the tax efficiencies and operative flexibility of partnerships and the limited liability attributes of corporations. However, while forming an LLC, the process is quite formal and mainly encompasses a lot more details including the duration of the LLC.
In conclusion, understanding these different forms of ownership is essential and would help one in deciding which business venture to pursue.
<span>The gdp price index for that year is 300. This is how we calculate this; Gdp price index = 100 x nominal gdp / real gdp =100 x 240 / 80 =24000/80 </span>Gdp price index = 300
B) raise costs and increase demand for its product
Explanation:
A monopolistic competition is when there are many firms operating in an industry. The firms sell differentiated goods and set the market price for their goods and services.
Monopolistic competition engage in advertisement to increase the awareness for their goods.
If advertising is successful , it increases the demand for their goods and services.
Advertising also increases the cost of production.
The word folly can best be defined as the lack of good sense/judgment or foolishness.
Explanation:
Advertisements are meant to create a positive impact in the minds of the people who view them. It is actually meant to provide more information about the product and the features that will benefit potential customers. It is thus important to use the right words, which wouldn’t have any negative words involved in it.
I feel the use of the word'' folly'' is not a good one, it's not sending the right messages to people, and it's not also achieving its main purpose.
