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Types and Examples of Firms


Oct 5, 2020
Types and Examples of Firms

Based on the table above the firm and CV have a lot in common. Especially in the case of permits that do not require the approval of the Ministry of Law and Human Rights. This is different from the PT, which the ministry has to know in detail. Firms also have various types that can be easily identified based on the business activities they undertake.

1. Trading firm

In this first type, we can immediately tell from the business being undertaken, namely trading. The main activity is of course buying and selling goods. There are quite a lot of examples of this business entity in everyday life, namely: A shoe company or shop that buys or produces shoes and then sells them. Food companies that buy or manufacture their products for resale.

2. Non-trading firm

This type is formed to run a business in the service industry. Its activities are focused on service products. The following are examples of non-trading firms that we can meet on a daily basis, namely:
Law firms such as legal consultants, law firms, and others.
Accounting firm or public accounting firm.
Business consultant.

3. General firm (general partnership)

This firm has a characteristic where each member has unlimited power. These general members have responsibility for the running of the company’s operations, both debt and receivables.

4. Limited firm (limited partnership)

This fourth type has a characteristic that its members have limited power over the company. In addition, the responsibilities and obligations of each million member are limited. So, this is the opposite of general firms, huh! An example is multi level marketing.

Strengths and weaknesses and disadvantages of business entities

Each form of business entity must have its advantages and disadvantages. For example, this business entity known by the acronym Fa with a CV is not strong enough from a legal standpoint. The reason is, these two business entities do not need approval in establishing them, even though they are still legal as business entities. The following are the advantages and disadvantages of the Fa that you need to know before starting a business entity.

1. Pros

The easiest thing to do for a firm’s strengths and a consideration for many new businessmen is the licensing that does not have to reach the ministerial level. Although, later this advantage will backfire as mentioned above. Well, here are some of the advantages of the firm over other business entities.

The management system of this business entity is more professional because of the clear division of tasks for each organizational structure. The selection of leaders is based on their respective abilities and expertise, even in this business entity usually has more than one leader. The large initial capital is not too heavy because it is obtained from the joint venture of each member who joins.

The notary deed makes it easy for this business entity to get a capital loan if it requires a very large amount of capital. Profit sharing is based on the initial paid-up capital so that the system resembles a share investment. The difference is, all members who invest in this business entity have the right to actively manage the running of the company.

2. Disadvantages

In case of flaws, the firm also has them. One of them is that there is no mention of (passive) investor such as in PT and CV, who are sufficient to pour money and then wait for the return on their investment. So everyone who joins has almost the same burden of responsibility.

Here are other drawbacks.

The responsibility of each member is not only for capital, but also for their personal assets or assets. If bankruptcy, personal assets and assets can be confiscated to ensure the company’s losses. If one member suffers a loss, all other members must share it. Likewise, if you experience a legal case, others can be dragged into.There is no separation between personal wealth and company assets. If there is an injustice in the distribution of profits, then there will be disputes that will affect the continuity of the firm.

With all the advantages and disadvantages above, we can choose a business entity from the three options above. However, you have to consider many other things including capital, investors, and the type of business you will be involved in.