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)
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
Corporation
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