In 2021, Enron showed a major downfall of revenue from $1 billion at the beginning of the year to filing bankruptcy at the end of the same year.Â
But how did this massive failure happen?
It occurred that Eron’s employees were using accounting loopholes, special purpose entities, and false reporting to hide the billion-dollar debt. With these felonies, they not only misled the board of directors but also pressured their auditors to disguise the evidence.Â
Had the ownership structure of this company been in place, this wouldn’t have happened. Also, if the executives of the organization had a monitoring mechanism, the situation would have been different.Â
For the uninitiated, structural ownership concerns the internal organization of a business entity and the rights/duties of the individuals holding a legal or equitable interest. The ownership structures can either be shared with the parent companies, affiliates, subsidiaries, or a single entity.Â
However, if you are a single entity, looking to structure ownership in your organization, beat the drum. As in this article, we will understand…
How to structure ownership in a company?Â
If you are planning to introduce a startup, it is important to decide whether it will have a sole proprietorship, partnership, limited liability company (LLC), corporation, or franchise form of ownership. To help determine which form is best for your organization, we have shared five critical factors. Additionally, each factor features 3 company ownership structure templates that can be used in board meetings, by the employees, management, or investors. Let’s dive right into them!
1. Number of owners
Your ownership structure will directly depend on the number of owners and how involved each will be in the day-to-day management activities. If you are a single owner, you can consider the sole proprietorship, LLC, or corporation. However, if you have more than one business partner, consider partnership, LLC, or corporation. And as the number increases, LLC becomes the best choice. Use these well-designed templates to represent your decision!Â
Template 1: Ownership Structure for Business Idea
You can use this ownership structure template to address the hierarchy in your organization. This design can be added to your company’s ownership document illustrating information about the executive chairman, CEO, chief entrepreneur, and employees. Besides, the presentation can be easily edited, so download it and make the desired changes.Â
Template 2: Allianz Shareholder Structure
For making an efficient decision, pick this Allianz – shareholder structure presentation. This premium design will help you decide whether or not you want the same organizational structure. So grab it immediately and share it with your audience using Google Slides.Â
Template 3: Business Ownership Template
Decide a shareholder ownership structure for your retail business with this well-thought-out design. This template can be used by an LLC business to represent the shares distributed among each shareholder. Download and include it in your presentation!Â
2. Investment and financing decisionÂ
Financial needs also play a crucial role in selecting the type of business entity. If you are planning to take a bank loan, be informed that banks are more likely to loan LLC and corporations over sole proprietors and partnerships. However, if you want to attract more investors, we suggest choosing a corporation as it can easily sell ownership shares as company offerings. But if you want limited liability, LLC would be a smart choice. Pick these company ownership structure templates to begin!Â
Template 1: Company Ownership with Financial Investors
This ownership structure template can be used by an LLC/partnership firm introducing various investors. This slide is crafted by our team of professional designers. So download it without any second thoughts!Â
Template 2: Business Ownership Structure
If you are planning to finance your firm using private equity, pick this design. This template illustrates a donut diagram that exhibits the financial stake of each shareholder. Download this amazing graphic to represent your company’s ownership structure to the investors.Â
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Template 3: Business Structure Including Shareholders
Raise capital for your business by sharing this topic-specific business ownership structure PPT design. This template has an impressive color palette and will surely help you attract investors. Therefore, download and utilize it to your advantage!Â
3. Expenses and formalities
To avoid massive expenses, one can select sole proprietorship and partnership forms of ownership as they do not require the filing of special forms or fees. However, if you wish to structure your company as an LLC or a corporation, get ready to pay a fee ranging from $40 to $800 (depending on the state). Choose from these impressive company ownership structure templates now!Â
Template 1: HEINEKEN Ownership Structure
Choose this Heinkein template to analyze the pros and cons of adopting an ownership structure. This case study design will help you conclude the importance of various ownership types. Download it right away to take inspiration.
Template 2: Generali Shareholder Structure
This is another invigorating shareholder structure template illustrating the division of Assicurazioni Generali financial services firm. This segregation will help you make an insightful selection for your startup’s ownership structure. Download this persuasive design now!Â
Template 3: Business Ownership Structure
Choose this creative ownership structure template if you are planning to collect funding through a Series B investment. You can replace the text, color, or font of this design and customize it as per requirement. Download now!Â
4. Risks and liabilities
If you are planning to start a risky business that offers products/services like trading stocks, repairing roofs, or providing insurance – select LLC or a corporation to protect your business from debts and claims. Choose from these sturdy templates and make a lucrative decision.Â
Template 1: Holding Company Ownership in Subsidiary PPT
Are you planning to start a sister firm? Use this template to depict the structure of your company’s full ownership in the subsidiary. This design can be used after a thorough discussion on the product or service type. Download once and use it multiple times. Â
Template 2: Business Share PPT
Showcase your company’s ownership structure before and after the funding process with this well-crafted design. The template includes a bar chart that represents the data/statistics efficiently. Therefore, download and add it to your ownership structure presentation.
Template 3: Enterprise Ownership Structure PPT
Share the financial holding of each member with this enterprise ownership structure template. This PPT design includes parameters like investment banking, venture investment, product partners, and more. So grab it and make the changes with your company information.Â
5. Income tax
Owners of a sole proprietorship, partnership, and LLC structure include the same level of complexities in filing returns. They need to report the company's profits and losses on their personal income tax returns. In contrast, the owners of a corporation ownership structure only address the profits received as salaries, bonuses, or dividends. Besides, they also enjoy a lower tax rate due to the new flat tax rate of 21%. These templates will surely help you represent the decision.Â
Template 1: Research and Development Structure
Use this template to specify your organization's research and development ownership structure. This design can also be used to understand the roles and responsibilities of all executives involved. Grab it right away!Â
Template 2: Ownership Structure with Reporting Manager
You can use this template to finalize your organization's reporting ownership structure. This decision will further protect you from paying excessive taxes. So grab this template and make a profitable decision.Â
Template 3: CEO Compensation Package by Ownership Type
Use this PPT design to represent your CEO’s compensation package as per the ownership structure of your company. This template includes the percentage of perks, benefits, equity gains, bonuses, and salaries. Download it and captivate your management.Â
In the end
We hope that these invigorating factors helped you understand the benefits and considerations of each business structure to make an informed decision. You can download our handy company ownership structure templates and start creating your legal documents with ease. Besides, you can enjoy unlimited access to these pre-designed templates by purchasing from our subscriptions here.Â
But if you need a customized ownership structure PowePoint template, our presentation services team will be happy to assist you. Connect with them today and get started!Â
P.S: You can also create an agile structure for your team by exploring this all-inclusive guide replete with actionable templates.Â
Download the free Ownership Structure PDF.