Setting Up a Business – What You Need to Know!
Business is a tricky subject to talk about. For many people the word “business” evokes visions of Wall Street and the millions who work there. Others think of small mom and pop shops and their endless yellow pages listing the names of local businesses. The reality is that most small businesses are owned by large corporations and although they may be local, they are still part of a global business. If you are interested in learning more about business and how you can start your own business read this article.
A business is defined by Webster as any of those enterprises or organisations whose products, services, resources, and finances are used by other people or organizations for a profit. A business is often used in business and industry circles to refer to the main economic activity of a country or area. A business can be a sole proprietorship, partnership, company, cooperative, syndicate, and even an institution. These broad classifications can sometimes be used in strategic management to describe how different businesses operate and where they are located on a local or international level.
Businesses differ greatly depending on the location. Globally there are two types of business: sole proprietorships and corporations. sole proprietor businesses are often referred to as the “personal” businesses because the owner only represents themselves and their interest is in their profit and loss return. Corporations are formed by a combination of owners who have common ownership interests but do not represent each other in the process of running the business. Most corporations are international but there are some businesses which are only local to a specific country or region.
Many businesses are initiated by one person who may be called the founder or owner. Often, when starting a new business the initial capital required is large. Sometimes venture capitalists and angel investors are sought after to provide startup capital. For some it may be a problem to raise capital for a business startup, if it is a service or product which is not in high demand and/or is unprofitable. In these cases, services or goods could be provided by another business or a sole proprietorship could be formed to make money through that service or product.
When forming a partnership in Hong Kong, you will first need to confirm that you are a genuine single person who owns and controls the business entity. The next step would be to choose the type of partnership, either general partnership, general, limited liability partnership. Once this decision is made then any others involved in the transaction will need to decide if they want to become members of the partnership or not. After approval of the application for the partnership, you can begin the process of establishing the business entity.
A sole proprietorship is considered to be the most flexible structure of partnership in the world of business. Using a sole proprietorship is highly advisable if the nature of the business being operated requires large amounts of capital, is very complex, has high risks, or requires extensive litigation. A sole proprietorship can be established through different methods including: grant deeds, mortgages, options, bank loans, shares, or even a share sale.