Types Of Businesses

The Real World Economics by Justin Green

The Structure of Proprietorship, Partnership, and Corporation

The Structure of the 3.

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

Proprietorship- Owned by 1 person and can receive all the profits. Quick decisions can be made if needed because the person doesn't have to consult with other people.

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

Proprietorship-Unlimited liabilities, Complete Responsibility for ALL debts and damages in the company. These debts will be paid by the owners car, house, jewelry, etc.

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.