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Types of Business Ownership

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Business ownerships are of different types. According to company ownership, a business establishes its structure and organizational process. Three important types of business ownership are as follows. Private Limited Company A private company is owned by a nongovernment body or by different shareholders. The company can have many owners. The owners of this company hold a certain number of company shares according to their position or contribution to the business. Different investors of this company become its shareholders. They are not allowed to trade their share or offer it to the general public.

Contribution of its owners had a huge impact on the business of a private company. The owners of the private company divide profit and dividend among themselves. Shareholders of this business have to take high risk for making the business successful. They contribute different resources for making the company successful. The owners play a major role in handling the management process of the company. They hold a strong position in the company. Owners of a private company have vast knowledge about the product and services of business they are offering.

As per their knowledge, they make different decisions about the business. For example, initially, Facebook was a privately owned company. Its different shareholders controlled its business operations and functions. Major decisions of the company were taken by considering different opinions of its investors. Partnership This type of business has one or more owners. These owners contribute a lot in establishing its business. They invest a lot of money and resources in the business. They take part in business process and decide the goal and objectives of the company.

For starting up a partnership business the owners sign various legal agreements with each other for establishing its business properly. Risk, resources, and funds of the business are shared among the owners. Profit and losses are divided on the basis of owners’ contribution in business (Abels and Klein, 2008). They have a limited liability of a business.

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