Types of Businesses

By Cody Christy

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Proprietorships

A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. The advantages of this is that the proprietor has full pride in owning the business and receives all the profits. The disadvantage of this is that the proprietor has complete legal responsibility of all debts and damages arising from doing business.
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Partnerships

The structure of a partnership is must first create a legal agreement identifying how much money each of you will contribute and what role each of you will play in the business. The advantages of a partnership is it is easy and inexpensive, creates a shared financial commitment, creates complementary skills, and pushes partnership incentives for employees. The disadvantages of this is creating a joint and individual liability, having disagreements between partners, and having shared profits.
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Corporations

A corporation (sometimes referred to as a C corporation) is an independent legal entity owned by shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs. Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements. Because of these issues, corporations are generally suggested for established, larger companies with multiple employees. Advantages of a Corporation is having limited liability, ability to generate capital, corporate tax treatment, and attractive to potential employees. Disadvantages of a Corporation is that it can take away needed time and money, be charged with double taxes, and having additional paperwork.

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