Three Types of Business

By: Joseph Linker

Proprietorships

1. Structure- They are owned by a single person

2. Advantages-Recieves all profits.

-Make decisions quickly, without consulting with a boss.

3. Disadvantages-The single owner takes all responsibility for any debt or liability.

-When a business has debt, all personal assets are at risk.

-Large firms offer better benefits because they can pay for them and take away from college grads.

Parterships

1. Structure-A business that two or more people own and operate.

-Will draw up a plan called the articles of partnership, which says that each owner must contribute a certain amount of money for the company to successfully contribute.

2. Advantages- A person can still own the business even if their is another owner.

-They still can take in large profits, but thats not the case if there is multiple owners.

-Each owner can bring a different and special talent to the business to make it successful.

-Larger size make for a larger and efficient operations.

3. Disadvantages-When a new parter is added or removed a new contract has to be made.

-Each owner has unlimited liability, and take full responsibility for their actions.

Corporations

1. Structure-It is started by the charter which states how much stock that each stockholder will have.

-Stockholders are owners and have a say in the business.

-The board of directors runs the day to day business that goes on in the corporation.

2. Advantages-The corporation can sell stock in the company which is revenue that they can use to make the corporation run efficiently.

-Corporations can expand to be very large and become a very successful business.

-The board of directors can hire new and professional managers to run the business and hire and fire the employees.

3. Disadvantages-Corporations are costly and time consuming to start.

-If the business is very large, and hundreds of people own stock in that company, then most people do not have a say so in the business.

-The government keeps a close eye on the corporations because the share holders need to know about the financial statement of the corporation.