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Business form part 2

posted Jul 29, 2014, 4:45 PM by Surendra Dhanpaul   [ updated Jul 29, 2014, 4:55 PM ]
As promised I am going to continue in my attempt to blog about how business forms differ. Again, I know that you can find all this information elsewhere online but I try to keep it as simple as possible in helping you understand these forms. 

  • Sole Proprietor – this is a one person business where the owner/investor/entrepreneur is the same as the business. 
  • Corporation – has legal personality. This means that it is an artificial person that can own assets, enter contracts, sue and be sued in its own name. The name ends in Inc.
  • Partnership – This is a business venture between two or more persons. The manner in which profits are shared, salary earned, interest on drawings and capital charged, etc is specified in the partnership agreement. This is preferably written.
  • Sole Proprietor – this is very easy to start. One simply gets the licence needed to operate in that business sector and start operation.
  • Corporation – this is complex to start. In Guyana and only in Guyana, one man can form a corporation. The person must go to Registrar of Deeds and follow the prescribed format in filing to form a corporation. Once the business has been incorporated, it is time to obtain licence in the name of the corporation. Once these are obtained, the corporation can start operations.
  • Partnership – the first step will be to form the partnership agreement. After this, the partners will need to apply and uplift licence to operate their business. After the licences are obtained, the business operations can start. 
See illustration 1

Government Control and Legal Obligation
  • Sole Proprietor – this form of business is not subject to much government control in relation to the accounting and form the Financial Statements take. Most of the control that government will exercise will be in regards to operations and maintaining standards for your products and services. Nevertheless, books of accounts must be kept.
  • Corporation – this form of business is subject to many government regulations. The format of the Financial Statements must take a particular format. It also attracts the intervention of government when it comes to standard of products and services. Books of accounts MUST be kept and in addition to that, books must be audited.
  • Partnership – this has semi-governmental controls. The format of the Financial Statements should take a particular format and here again there must be standards of products and services to upkeep. Books of accounts must be kept but need not be audited.
See illustration 2

  • Sole Proprietor – the business is owned by the investor. If the ownership changes then it is basically a new business all together as all the licences would have to be transferred out of the name of previous owner to current owner.
  • Corporation – it is owned by shareholders. Its ownership can be transferred without affecting the start and stop of the business. The business remains the same even if the owners of the shares change.
  • Partnership – the partners are all part owners of the business.