Types of Business

by:davin wilhelm


- sole proprietorship- operated by a sole or single person


- person has full pride in owning

-receives full profits

- makes decisions easy and fast


- unlimied liability

-complete responsibility pn debts and damages

- owners personal assests may be seized

- difficult to raise financial capital

- can't attract qualified employees


- instead of taking out a loan to expand, a business that two or more people own


  • draw up a article of partnership

- how much money each will contribute

- what role each will play

- share profits and losses

-how to break up the business

General - all are responsible for the management and finacial obligations of the busness

limited-It is a partnership in which only one partner is required to be a general partner


  • Businesses as partnerships do not have to pay income tax; each partner files the profits or losses of the business on his or her own personal income tax return. This way the business does not get taxed separately.
  • Easy to establish.
  • There is an increased ability to raise funds when there is more than one owner
  • Wider pool of knowledge, skills, and contacts.
  • Improved management with more than one owner.


  • Partners are jointly and severally liable for the actions of other partnership , the third party can sue any one of the partners without suing all of them.
  • Each partner is individually liable for the debts and obligations of the business;
  • A partner cannot transfer interest in the business without the unanimous consent of the partners.
  • Partnerships can potentially be unstable because of the danger of dissolution if one partner wants to withdrawal from the business or dies.
  • Coporations

    Structure- corporation is a separate legal and tax entity created by individuals who offer money, property or both for the corporation’s capital stock.


    The corporation remains separate from those who manage and control the operations of the business.


  • There is a pooling of capital from many investors and it is therefore easier to get the business up and running.

  • Shareholders are not personally liable for the debts of the corporation.

  • disadvantages-

  • Have to file Articles of Incorporation with the Minnesota Secretary of State and a filing fee.

  • Double taxation. The profits of the corporation are taxed as they are earned at a corporate level, and the profit is also taxed to the shareholders when it is distributed out as dividends.

  • Shareholders that control and own a significant amount have a dominant voice in the management of the business in comparison to shareholders that do not own as much stock.