Critically Discuss key International Differences in Ownership Structure of Firms Around the World

BUSINESS OWNERSHIP STRUCTURES
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Business Ownership Structures
International Differences in Global Business Ownership Structures
The decision to start a business involves many choices, and among them is the type of legal structure that will form the enterprise. The selection of the structure will have a significant influence on the total taxes to be paid by the business, the amount of paperwork involved in setting up the business, personal liability and one’s ability to raise the required capital. Decisions made requires a full analysis, and not based on assumptions (ENTREPRENEUR, 2016). Consulting business experts pay a lot to have an overview of the different structures of successful working models. The conventional business structures include sole proprietorship, partnership, corporations, and limited liability companies among others. The implications of the choice of a business structure vary from the legal liabilities, tax implications, starting and administrative costs, and the flexibility of the enterprise to changes in the markets and, the business should consider the needs of the future (Queen Mary University of London, 2014). Different countries have diverse requirements that have been set for one to register a particular business structure. The essay discusses the differences that exist in business ownership structures globally, with the case studies being Brazil and the United Kingdom.
Sole Proprietorship
The most common and simplest business structure, it is an unincorporated type of business whereby it is owned and managed by one person, with no distinction between the owner and the
Business. The owner enjoys to all the profits and losses in case of occurrence. It is a disadvantageous type of structure due to its dependence on the proprietor to exist (ENTREPRENEUR, 2016).
Sole Traders in the United Kingdom
The category forms the majority of the types of businesses, with at least twenty percent of the sole traders working in the construction industry, another twenty percent in the retailing sector, ten percent in finance and another ten percent in the catering business. People prefer this type of business due to the simplicity in starting and paperwork involved. Before registering as a sole trader, one has to register first as a self-employed with HMRC to avoid fines of up to a hundred percent in taxes. The taxes are paid based on the profits made by the business. Those operating as sole traders are required to pay a flat rate insurance contribution as stipulated on class 2. Annual earnings exceeding 8,060 pounds are required to pay taxes based on class 4 rates. The sole trader submits employee’s taxes to the HMRC. Also, no registration fees charged to start a sole proprietorship (Gov.UK, 2016).
Sole Traders in Brazil
The wealth and assets of the person and the sole proprietorship are the same, making the business owner personally responsible for the firm’s debts. Starting a sole proprietorship business involves registration within the board of trade based on the primary activities of the enterprise. Also, registration with the internal revenue service, the secretary of the state treasury and the local government provide the business permit and other licenses (Wilson, 2011). The complementary law 123 of December 2006 provides for, structuring of an enterprise, and is required for filing. One is bound to pay up to thirteen euros to start a sole trader business in Brazil.
A sole proprietorship is a common type of business activity in the UK due to its simplicity in starting and running the costs of starting are less; it is preferred and afforded by all people. However, in Brazil, the procedures of establishing a business are cumbersome and expensive, hence the small number of running businesses.
Partnerships
A partnership results when two or more people agree to share the ownership of a single business, with all the partners contributing to all aspects of the firm starting from capital to labor. Since more than one individual is involved, it is important that crucial issues are discussed and a binding agreement signed. The type of business is advantageous since there is shared responsibilities and hence the business can still run when one member is not available. Profits and losses are also shared among the members (ENTREPRENEUR, 2016).
Partnerships in the United Kingdom
At least two people and a maximum of twenty form partnership businesses in the United Kingdom. An act of parliament in 2002 made provisions for bigger firms to have more than twenty partners with the enjoyment of limited liability. The advantage of the partnership is the sharing of skills and work making the running of business efficiency. They are set by writing agreements with solicitors witnessing. The exchange of profits and losses is defined in the agreement. In the United Kingdom, partnerships are either general or limited. In general partnerships, members are liable individually for the debts and obligations of the business, whereas, in limited partnerships, the members have reduced liabilities to enterprise bonds. Partnerships are also registered with the HRMC for purposes of taxation.
Partnerships in Brazil
Partnerships between individuals to form businesses are not common in Brazil. The most common joint ventures are between limited companies, both local and international, to compete for government contracts. Partnerships between businesses are advantageous as it increases the trading potential, hence, the ability to contract for contracts with larger capital requirements and profit turnover. Individual companies make payment of taxes at a personal level ( SÃO PAULO, 2012).
Looking into the business partnership in the UK it is evident that there is a higher flexibility in the investment system to encourage the citizens to venture into business. Those who have no capability at the individual level to invest as sole proprietors can still invest in groups. Contrary, the Brazilian system of business registration is disadvantageous to persons who have no capability to start the sole trading enterprises or companies since partnerships at the individual level are not common. This confirms the results of research undertaken, showing Brazil among cou...