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Which type of ownership should my business have?

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Introduction

Which type of ownership should my business have? My idea for a business is a small-sized (perhaps medium-sized) company, which produces laptops- simply. However, our laptops are unique. They are around 8 inches wide, making them one of the smallest true laptops on the market. There are smaller so-called "laptops" but these are more like glorified PDAs (e.g. Sony Vaio VGN-U50). Our laptops are designed for travelling businessmen and school pupils, secondary school pupils in particular. Being so small, the laptop can easily fit into a school bag or briefcase, even in a handbag if needed. The main USP is its size. It is also supposed to be easily affordable, mainly for the school pupils' sake. Finally the diminutive laptop should be powerful. Many people now do lots of things on the computer, having lots of RAM-intensive programs running at the same time, and school pupils will not just use the laptop for their work, it also serves as a recreational facility- for use with games and multimedia. ...read more.

Middle

There are several advantages of the partnership type of ownership; the first one being that we can have a small number of partners/owners, in our case, 3. With 3 people (or more than 1 person) owning the person, more capital can be invested, so we can get manufacturers to produce high quality goods, instead of laptops that break easily or crash at the slightest tap. Each partner also has an evident specialist skill, for example, Osama may be good at keeping accounts and Craig may be good at persuading prospective suppliers/manufacturers, and I may be good at making things run on schedule, and actually selling the products. We could all be good website designers. We can share the work of the business between us, and if someone is ill, the routine and work will not suffer too badly. Partnerships are quite easy to set up as well, there are no complicated and pricy legal processes required to set up this type of business organisation. ...read more.

Conclusion

Reasons why I chose partnership type over the other ownership types: Sole owner * There are 3 owners, therefore this would not be possible * Shortage of skills and capital Private limited Company * Financial information is not private, so competitors could access the information and steal unique ideas * We need to sell shares to use as capital, but they cannot be sold to the general public- it can be difficult to find buyers. * Shareholders will expect a cut of the profits as dividends, but this can drain the company's assets * Incorporation is a long and expensive process * More complex organisational structure, whilst we are a small business Public Limited Company * Their shares can be sold to the public :)(adv.) * To become a PLC, a company must have issued at least �50,000 worth of shares * Dividends- can drain company's assets * Possible takeover bids- Other companies can buy large quantities of shares in our business, and ask other shareholders to sell their shares. When this other company gains enough shares, the ownership will change. ?? ?? ?? ?? JA ...read more.

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