Types Of Businesses
The Real World Economics by Justin Green
The Structure of Proprietorship, Partnership, and Corporation
Proprietorship- Owned by a single person.Example: Barbershop
Partnership- You and your partner create a legal agreement of partnership
Corporation-A person who wants to start a corporation must get a government document granting the permission to create.Stockholders are the owners and the stock is how much of that business they own.
The Advantages of Proprietorship, Partnership, and Corporation
Partnership- The pride of sharing a business, multiple owners and can raise more money
Corporation- The ease of raising Financial Capital and raising capital(allows companies to be large)
The Disadvantages of Proprietorship, Partnership, and Corporation
Partnership- The legal structure is complex because when a parter leaves or a new one comes along, a new document has to be created. Unlimited liability, meaning that each of the owners are responsible for the debts.
Corporation-the owner has little power and has to pay double taxes.