ADVANTAGES / DISADVANTAGES OF PARTNERSHIP Archives

TYPES OR FORMS OF BUSINESS ORGANIZATIONS The various forms / types of business organization can best be illustrate with the diagram below TYPES /FORMS OF BUSINESS A B C D E Sole Proprietorship Partnership Co-operative Private Public Shoe mending -manufacturing society Limited Limited Kiosk ownership -farming Thrift Co-op Liability Liability Farming - Estate Farmers Company Company Supermarket, -Management Consumers WABP LTD Zenith Bank -Consultancy, Multi Frank & Sons 1st Bank Purpose Co-op, Addox Pet UBA Dev. Ltd Unilever etc Advantages and Disadvantages of Sole Proprietorship ADVANTAGES DISADVANTAGES 1 It requires small capital to establish 1. The capital is usually small because it is Personal saving. The owner maintains close contact with customers 2. The sole proprietor may not have the required knowledge / experience The business is easy to establish The owner makes all decisions about the business 3. The business may not stand the competition All the profit belongs to the owner, etc. of bigger ones 4, When the owner dies, the business may also die. The liability of the sole proprietor is unlimited. EVALUATION State three(3) advantages of a sole proprietorship business List and explain three (3) disadvantages of sole proprietorship ADVANTAGES / DISADVANTAGES OF PARTNERSHIP ADVANTAGES DISADVANTAGES Two or more persons contribute capital 1. The mistake of one partner affects all others Two or more persons combine knowledge/ 2. Decision-making is slow. Experience 3. Partners suffer unlimited liability The risk of the business is borne by the partners 4. No new partner can be admitted without the consent of other partners Division of labour can be practised in administration 5.Better decisions are made by the partnership 5. Any partner can bring the partnership to an end. EVALUATION Define a sole proprietorship. What is partnership? ADVANTAGES/DISADVANTAGES OF CO-OPERATIVE SOCIETY ADVANTAGES DISADVANTAGES It is run democratically so each member 1. Capital is limited to the ability of members to pay. has one vote. It encourages saving habits among members 2. There can be mismanagement by unqualified people. executive Profits are shared in proportion to The decision-making process is longer compared contribution. with the sole proprietor. Members are able to solve problems Lack of proper planning and ignorance may affect beyond their individual means because the success of the society. of co-operation. 5. The society may fail due to lack of commitment from Every member is bound to benefit from the elected officials Co-operative society; it caters for the welfare of members EVALUATION Define a co-operative society. State three (3) advantages and three disadvantage of a co-operative society Advantages and Disadvantages of Private Limited Liability Companies Advantages Disadvantages It is separate from its owners It is relatively more difficult to form than a sole proprietorship. Owners or shareholders enjoy Ownership is separate from management. Limited Liability. 3. Decision making is relatively slow because of size. Capital is easier to accumulate than It cannot invite the public to contribute to its capital. than that of a sole proprietorship. It is not compulsory to publish its financial records. ADVANTAGES AND DISADVANTAGES OF PUBLIC LIMITED LIABILITY COMPANIES Advantages Disadvantages It can invite the public to buy its shares It must publish its financial statement in national dailies. It can employ experts. It must submit its financial plans to the Nigerian It can engage in research and development. Stock Exchange. It can enjoy perpetual existence. Establishment of a public Limited company is complex Shares are transferrable easily. and involving. Ownership is separate from the management of the companies. EVALUATION State two differences between a private limited liability company and a public limited liability company. List three advantages and two disadvantages of a public limited liability company. GENERAL EVALUATION QUESTION Define a company. List four different types of business units in Nigeria State three advantages and three disadvantages of a private limited liability company. State two similarities between a co-operative society and a public limited company. List three advantages and three disadvantages of a sole proprietorship. WEEKEND ASSIGNMENT – SECTION A The business unit that must publish its financial statements in the national newspaper is Partnership B. Private company C. Public Company D. Sole proprietorship The business that are separate from their owners (i.e separate legal entities) are A. Partnership and sole proprietorship B. Partnership and private companies C. Sole Proprietorship and public Company D. Private and public companies The business owner who does not share profit with anybody is A. Sole trader B. Partnership Private company D. Share holders ______ is formed to carter for the welfare of its members A. Partnership Co-operative society C. Sole proprietorship D. Public company Dividend is a share of profit to ______ A. Debtors Creditors C. Partners D. shareholders Section B List five forms of business unit you know in Nigeria State three advantages and three disadvantages of a partnership’ business See also IMPORTANCE OF ENTREPRENEURSHIP ENTREPRENEURSHIP ETHICS IN SOURCING CHEMICALS HONESTY IN BUSINESS TYPES OF OCCUPATION

FORM OF BUSINESS ORGANIZATION