 Aims/Benefits of the micro project

Ownership, in its most comprehensive sense, refers to the relationship between a person and
any right that they possess. Anything that a person possesses can be considered a right. When
we talk about owning a physical object, it is usually just a way of speaking. To own a piece of
land actually means to possess a specific type of right in that land, specifically the fee simple
ownership. Ownership is an important concept in society because it indicates wealth and social
status. Owning land was a way for individuals to control the government. In a feudal system that
was based on land ownership, the feudal lords had significant power and even the right to vote
was dependent on land ownership.

 Course outcome addressed

1. Use basic management principles to carry out daily activities.

2. Use the principles of planning and organizing tasks.
3. Use principles of direction and control to implement plans.
4. Apply safety management principles to all activities.
5. Understand the various provisions of industrial acts.

 Proposed methodology

1. Focused on the selection of an appropriate topic for the micro-project.

2. Select the topic i.e. To Prepare a report on " forms of ownership"
3. Brief study on our topic.
4. Gather all information based on the topic of the micro project.
5. Analysis and study of our topic in detail.
6. Following all the above methodologies we successfully completed our microproject.
 Resources used
Sr. No. Name of resources Specifications Quantity

1 Textbook/ manual - 1

2 Internet Wikipedia -

3 Computer Windows 10 1

 Brief Description: -

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The initial choice that a business owner will have to make is how to structure their business. It is
important to understand the pros and cons of various forms of business organization in order to
make the correct decision for the new business. Every business must adopt a legal configuration
that outlines the rights and responsibilities of those involved in the ownership, control, personal
liability, lifespan, and financial structure of the business. The chosen form of business also
determines which tax return form needs to be filed and establishes the legal liabilities of both
the company and its owner.

 Sole Proprietorship

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Most sole proprietorships are small businesses owned by individuals. An individual who starts a
business is called an entrepreneur. The term "sole" refers to being single or one. The term
"proprietor" means owner. Therefore, a sole proprietorship is a business that is owned by one
person. It is the oldest and most common form of business ownership, with approximately 75
percent of all businesses in the United States organized as sole proprietorships. The majority of
small businesses initially start as sole proprietorships. These businesses are typically owned by
one person who is responsible for the day-to-day operations. Sole proprietors can be
independent contractors, freelancers, or home-based businesses.

Advantages:
1. The owner gets all the profits.
2. Profits are taxed only once.
3. The owner makes all the decisions and has full control over the company (but this may
also be defect).
4. It is the easiest and least expensive form of ownership to organize.
5. They are easy to form, and the owners have sole control over the profits of the
business.

Disadvantages:
1. There is unlimited liability if anything happens at work. Your personal assets are at risk
(Including your home in Kansas City).
2. It is limited to raising funds and the owner may have to obtain consumer loans.
3. There is no separate legal status.
4. Unlimited liability means when someone in the business pays debts by selling assets
At work.
5. Taxes A sole proprietor pays taxes individually because he invests all forms of capital
All identification papers are registered in his name.

Example:
 Art studio
 A local grocery
 IT consultation service

 CORPORATION

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A corporation is legally recognized as a separate entity from its owners, with the ability to be
taxed, sued, and make contractual agreements. It has its own existence and does not cease to
exist when ownership changes. A corporation is a business that is granted legal status with
distinct rights, privileges, and liabilities separate from its employees. Corporations can vary in
size, from a one-person business to a multinational operating in multiple countries. Publicly
owned portions of a corporation are referred to as stocks or shares. Individuals who own these
shares are known as shareholders and become owners of the business.

There are three types of corporations:

1. C-corporation,
2. S-corporation
3. Limited Liability Company

1. C-corporation:
A C-corporation, which is taxed separately from its owners, offers limited liability to its owners,
thereby promoting increased risk-taking and potential investment.
Advantages:
- It is limited liability.
- In regards to transfer of ownership, shareholders can sell their shares.
- The company pays fringe benefits.

Disadvantages:
- It is subject to double taxation. (Corporation and shareholder earnings are taxed.)
- It can be costly to form.
- C-corps pay corporate taxes at a different time than other forms of business.
2. S-Corporation
An S-corporation, which is also referred to as a subchapter S-corporation, provides limited
liability to its owners. These corporations are exempt from income taxes, and instead, the

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profits and earnings are considered as distributions. Shareholders are required to report their
income on their personal income tax returns.

Advantages:
- It enjoys limited liability.
- It avoids double taxation.
- It offers transfer of ownership.

Disadvantages:
- It can be costly to form.
- Stockholders are limited to individuals, estates or trustees.
- Stockholders are limited to citizens or resident aliens of the United States.

3. Limited Liability Company:

An LLC, or limited liability company, is a business structure that combines the limited legal
liability of a corporation with the operational flexibility of a partnership or sole proprietorship.
However, the process of establishing an LLC is more intricate and formal compared to that of a
general partnership.
Advantages:
- It is the most common business structure and is specifically created for small businesses.
- LLCs are usually taxed as a sole proprietorship.
- LLCs can have an unlimited number of owners.
Disadvantages:
- It requires yearly administrative costs.
- LLCs have a personal tax liability.
- Legal and accounting assistance is recommended for LLCs.

 Partnership
Partnership is a form of business ownership where two or more people share ownership. Similar
to proprietorships, the law treats the business and its owners as one entity. To ensure smooth

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operations, partners should have a legal agreement that outlines decision-making processes,
profit sharing, dispute resolution, admission of new partners, buyout procedures, and
dissolution of the partnership if necessary. Partnerships involve complex negotiations and
unique challenges that require careful consideration and agreement. Various factors such as
overarching goals, give-and-take dynamics, responsibilities, authority, succession plans,
evaluation and distribution of success, among others, must all be carefully negotiated. Once an
agreement is reached, it can be legally enforced under civil law, especially if well-documented.
To make their agreement enforceable, partners often create Articles of Partnership. Trust and
pragmatism are also crucial as not everything can be stated in the initial agreement,
emphasizing the importance of effective governance and clear communication for long-term
success. It is common for information about formal partnerships to be made public through
press releases, newspaper ads, or public record laws.

Advantages:
- It is easy to establish (with the exception of developing a partnership agreement).
- Separate legal status gives liability protection.
- Profits are taxed only once.
- Partners may have complementary skills.

Disadvantages:
- Partners are jointly and individually liable for other partners’ actions.
- Profits must be shared with the partners.
- Decision making is divided.
- Business can suffer if the detailed partnership agreement is not in place.

 Co-operative
A cooperative is a privately-owned business that is controlled by the individuals who use its
products, supplies, or services. While cooperatives can differ in terms of their type and the size

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of their membership, they are all established to meet the specific goals of their members and
are designed to adapt to their changing needs. Typically, a cooperative only allows a limited
distribution of profits to its members, with some cooperatives not allowing any distribution at
all. This business structure promotes a democratic management style and encourages the
sharing of resources and delegation to enhance competitiveness. A cooperative is a business
that is owned and operated by the workers or members who purchase its products or utilize its
services. The primary focus of this type of business is on providing service rather than making a
profit. Similar variations of this business model include consumer, retail, and worker
cooperatives.

Advantages:
- Generally inexpensive to register.
- All members must be active in the co-operative.
- Members have an equal vote at general meetings regardless of their level of investment or
involvement.
- Then directors, members can be aged less than 18 years. These members cannot stand for
office and don’t have voting rights.

Disadvantages:
- As co-operatives are formed to provide a service to members rather than a return on
investment, it may be difficult to attract potential members seeking a financial return.
- There is usually limited distribution of profits to members and some co-operatives may
prohibit the of distribution of any surplus.
- Members providing greater involvement or investment than others will still only get one vote,
- Requires on-going education programs for members.

 Outputs of the Micro-Project

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Ownership is a socially significant concept because it is an index of wealth, and social position.
Ownership of land was the means of controlling government. In a feudal system based on land
ownership, the feudal lords wielded tremendous influence, and even the qualification to vote
was based on ownership of land. The social aspect of ownership also highlights the important
principle that on owner shall enjoy his interest in a manner compatible with the interest of
others.