The organizational structure of "individual company" is simple, there is no shareholders' meeting and board of directors, only one shareholder, the owner and the operator are integrated, there is no agency cost, and there is no difference in the objective function between the owner and the operator. Quick and flexible decision-making, able to cope with complex and changeable market demand. It has irreplaceable advantages such as simple internal structure, flexible operation mechanism and high operation efficiency.
Extended data:
Characteristics of wholly-owned enterprises
(1) The establishment and dissolution procedures of enterprises are simple.
(2) Flexible and free management. Business owners can determine their own business strategy and make business decisions completely according to their own will.
(3) The owner shall bear unlimited liability for the debts of the enterprise. When the assets of the enterprise are insufficient to pay off the debts, the owner pays off the debts of the enterprise with his personal property. It is beneficial to protect the interests of creditors, but wholly-owned enterprises are not suitable for high-risk industries.
(4) The scale of the enterprise is limited. The limited operating income, limited personal property, limited working energy and management level of a sole proprietorship enterprise restrict the expansion of its business scale.
(5) The existence of enterprises lacks reliability. The survival of a wholly-owned enterprise depends entirely on the personal safety of the owner, and the life span of the enterprise is limited. In the modern economic society, wholly-owned enterprises play an important role.