Owning a business is the first decision to be made in constructing a business. The main reasons to own a business are −
● Being the sole trader
● Being a partner
● Being a shareholder or stakeholder
Sole ownership means all decisions are to be made by self and profits can be owned. However, the sole trader needs to monitor lots of responsibilities and duties and needs to work extremely hard.
Establishing a partnership makes it possible to distribute the workload, but profits have to be shared and there may be conflicts between partners. Establishing a private company, makes it possible to increase extra capital for the business by selling shares. In contrast, building up a company needs time and paper work. Shareholders take a portion of the profits. When the business is expanded across the nation, it is declared as a public company and its shares are traded on the stock exchange.