The ownership of eWave is a partnership. This partnership consists of four co partners and a sleeping partner. The five owners have equal shares of 20% each. A sleeping partner is an owner who invests money into a partnership, but isn't involved in the day-to-day running of the business. However, they still get some of the partnership's profit. There are some advantages of having a sleeping partner as the partner can be a useful source of short term finance if an already existing partnership is having money problems.
Another advantage can be Sleeping partners provide instant finance to businesses that are in the process of setting up a partnership. The person whom first wanted the firm eWave was Koyes Haque Chowdhury. Koyes could have decided to be a sole owner of eWave computers as always there are advantages and disadvantages of a sole owner. The central advantage is that he has ultimate control over the company and he could make a lot of money if the company is successful. The disadvantages of Koyes being a sole owner is that Koyes would have to pay wages to the workers even if the firm is struggling this could result in debt.
The business will also have an unlimited liability (lose everything invested in the business to pay the debts of). The owner Koyes would be responsible, or liable, for all debts and actions of the business. Why partnership was chosen as the ownership type? eWave's ownership is a partnership. With four co workers and one sleeping partner. eWave computers is owned by partners, these partners all have different skills and qualifications that will help the firm to succeed. They also have skills that will help running a small business. The four co workers have different qualifications:
Shamsul Haque: BSc internet programming Koyes Haque ChowdhurInternet engineering Sirajur Rahman: BSc mathematics Motosir Ali: BSc mathematics and computing Their status or their position in the business is different to each other even though they own the same amount of the business. Shamsul Haque: Managing Director. Koyes Haque Chouwdry: Company Secretary, Operations and Service Management. Sirajur Rahman: Accounts and Finance Management. Motosir Ali: Shareholder, Marketing. All these people knew each other in university. They were friends. As you can see all the co workers have different skills.
This pushed them into making their own business. The business had a sight of success as they all had different qualifications. These qualifications will be helpful in running a computer business. Despite their high achieved qualifications they had no experience on business which I s a disadvantage on their partnership. As you can see all 4 partners have different qualification on the business. They know each other therefore they will have trust in each other. They also live near each other so if they a problem it's not going to be difficult for them to sort out the problem.
If eWave was a sole owner it would be extremely difficult for the firm to raise money. A modern day business needs a lot of money to survive. Moreover it is also a risk to be a sole owner as a lot of money could be lost if the business isn't successful. This is why eWave chose partnership as the ownership. A partnership is less risky and more money can be raised for the business. As there are four members in the business money can be invested from all directions. I also believe that eWave have chosen a partnership because the company will have money coming in from five directions instead of one.
Moreover all the owners excluding the sleeping partner have the same responsibility. Advantages and disadvantages to partnership There can be many advantages of partnership aswell as many disadvantages. Advantages such as: Access to more money. Shared responsibility. Easy to set up. Access to more money; as eWave has five partners this means that there will be a lot of money invested in the business. All five members will contribute to the success of the business by contributing money. However if eWave was a sole owner there wouldn't be a lot of money coming in.
Partners can raise more money by using different ideas and skills. Shared responsibility; there are five owners of eWave, however we have to exclude the fifth member as he is a sleeping partner. This leaves eWave with four owners. As the firm is a partnership it means that all owners who are involved in the day to day running of the business have shared responsibility in other word everyone has equal responsibility. If eWave was a sole owner it would cause some problems to the owner as he would have a lot on his plate to deal with. And most probably he would not be able to cope with the pressure.
Easy to set up; the firm will be easy to set up there are not many members. Moreover all the partners will know what the business aims to do and how they will achieve their target. The owners will also know what they will have to do in order for the firm to be successful. There also are some disadvantages to the ownership type of partnership. Disadvantage such as: Unlimited liability. Partnership dissolves after death of a partner. Conflict could arise. No past experience on businesses. Partnership dissolves after death of a partner; as eWave is a partnership there are members in it.
However if a member dies in any case the business will dissolve. However if eWave was a private limited company the business will still continue as the firms runs in the family. Conflict could arise; this is a problem which could affect any businesses which have partnership as the ownership. As all the members have the same share in eWave this means that all the owners have equal rights and say. This could create problems. No past experience on businesses; this will apply to eWave very much as the firm is a new business with owners who haven't had any previous experience on a business running.
So this means that at times they will not know what to do as they are still amateurs at running a business. Unlimited liability; if the business doesn't succeed in the business world this will cause a great deal of problem as they will make a loss in their money which will then lead them to debt. Unlimited liability is when owners of a business may have to sell off some or all or some of their personal possessions to meet the debts of the business. This means if in any case eWave fall in debt each member will have to pay money to repay the debt. This is a disadvantage as a lot of money can be lost.