Ownership

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


-Advantages

~One owner

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

~unlimited liability


-Disadvantages

~Liability is laid upon the owner and owner only

~Self-employment tax

~The business is no longer continued once the owner dies

Partnership

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

Examples-Law Firms, practice firms, Global companies


-Advantages

~Easy to start

~Raising funds is often easier

~Partnerships tax returns often go to their own pockets


-Disadvantages

~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


Advantages

~individual tax returns

~flexiblity in business

~reconginized by government


Disadvantages

~Some states don't recognize LLP

~Addidtional taxes

~Less business credibilty

Business Entities - Limited Liability Company

Corporation

Corporation is a structure separate from its owners

Examples-McDonald's, Dr.Pepper, Coke

Advantages

~not liable for debts

~only risk equity (shareholders)

~exempt from federal income tax if S Corportation


Disadvantages

~very risky

~infringement

~competition