By John Robinson

4 Types of Ownership in business

Sole Proprietorship which is when a person owns a business or company and is PERSONALLY responsible for the debts it faces

Examples- Mining, Construction, Agriculture


~One owner

~profits (and losses) are passed to the one who owns the company

~unlimited liability


~Liability is laid upon the owner and owner only

~Self-employment tax

~The business is no longer continued once the owner dies


Partnership is when one or two people share a company or business (usually both helped create it)

Examples-Law Firms, practice firms, Global companies


~Easy to start

~Raising funds is often easier

~Partnerships tax returns often go to their own pockets


~Disagreements can ruin a company

~Splitting up profits

~Leadership or who is in charge can often backfire

Limited Liability Partnership (LLP)

LLP is an agreement between two people to help cover against any losses

Examples: doctors, firms


~individual tax returns

~flexiblity in business

~reconginized by government


~Some states don't recognize LLP

~Addidtional taxes

~Less business credibilty

Business Entities - Limited Liability Company


Corporation is a structure separate from its owners

Examples-McDonald's, Dr.Pepper, Coke


~not liable for debts

~only risk equity (shareholders)

~exempt from federal income tax if S Corportation


~very risky