Business Organizations

A Guide to Different Business Structures

Sole Proprietorship

Characteristics that make the structure unique:
  1. One person is in total control.
  2. The company does not pay taxes separately from the owner.
  3. All earnings of the business are taxed as income of the owner.
  4. Most small businesses begin as sole proprietorships.

Advantage: Owners can establish a sole proprietorship, easily and inexpensively.

Disadvantage: Owners cannot raise capitol by selling an interest in the business.

Examples:
  1. Landscaper
  2. Financial Planners
  3. Restaurant Owners

Interesting Details:
  1. Owners of sole proprietorships have severe potential liabilities from customers, competitors, lenders, employees, and even government.
  2. More than 20 million proprietorships in the U.S.

Partnership

Charcteristics