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Different Forms of Business Ownership and their Characteristics

This chapter explores the various forms of business ownership, including private enterprises, public enterprises, sole proprietorships, partnerships, limited companies, joint ventures, and franchises. It discusses the major differences between small and medium-sized enterprises (SMEs) and multinational corporations (MNCs) in Hong Kong, focusing on their size, ownership, management, financing, and decision-making processes.

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Different Forms of Business Ownership and their Characteristics

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  1. Chapter 3 Forms of Business Ownership

  2. Forms of Business Ownership • An enterprise is an organisation that produces and/or provides goods and/or services. • Private enterprises • Owned by private individuals • Mostly locally-owned businesses • Public enterprises • Owned by the government • Provide the public with essential goods and services

  3. Forms of Business Ownership Sole proprietorships Partnerships Limited Companies (Private/Public) Joint ventures Franchises Private enterprises Business enterprises Government departments Public corporations Public enterprises

  4. Major Differences between SMEs and MNCs in Hong Kong Relatively small in size Large companies Most are sole proprietorships, partnerships or private limited companies. Most are listed public limited company. Most are involved in the businesses of import and export, retailing and catering… MNCs are involved in different businesses. The owners and their family members Professional managers

  5. Major Differences between SMEs and MNCs in Hong Kong Most are labour-intensive operations and use relatively simply technology. Mostly capital-intensive and technology-based. MNCs can raise capital by issuing shares and bonds, getting loans from banks etc. Mostly financed by the owners’ personal savings. • SMEs are more flexible because the owners can make decisions quickly. • They can make changes to satisfy customer demands much faster. • MNCs have more complex organisation structures and processes. • They are slow in decision-making and making changes.

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