Types of Business Ownership

Drake Carrick

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Special Types of Ownership

Specialized Partnerships

  • Dormant- plays no role and is not known to the public
  • General- plays an active role and has unlimited liability
  • Limited- participate as investors and have limited liability
  • Secret- plays an active role but is secret from society
  • Silent- does not have and active role but is known to the public
Specialized Corporations
  • Subchapter S- treats partners by individuals by taxing them once
  • Limited Liability Company- provides limited liability for owners
  • Nonprofit corporation- a group of people who join to do some activity that benefits the public
  • Domestic- chartered in a specific state
  • Ex:Foreign, Alien, Public, Private
  • Cooperatives- owned by members, serves their needs and is managed in their interest
  • Franchise- permission to operate a business to sell products and services in a set way
  • Ex: McDonald's

Corporation

  • One or more owners
  • Managers, board of directors, and shareholders
  • Filing an Article of Incorporation with state government
  • Easier to obtain capital; Limited liability for shareholders
  • Double taxation; increased government regulations and legal restrictions
  • Limited liability
  • Bank of America Corporation
  • May have unlimited lifetime; If needed, determined by charter or article of dissolution
  • Purchase of stocks

Partnership

  • Two or more owners
  • Dormant, General, Limited, Secret, Silent
  • Determined by partnership agreement; may be one or more partners
  • With a partnership agreement; Varies by state
  • Shared management responsibilities; Shared risks
  • Shared profits; responsible for each others decisions
  • Unlimited liability
  • South Railroad Limited Partnership
  • Actions of the partners, bankruptcy, death, and/or court order
  • Personals of partner(s), gifts, borrowed, and others may vary

Proprietorship

  • One owner
  • May be owner; Owner participates in all day-to-day operations
  • Begin buying and selling goods or services; may vary by state
  • Easy to start-up; Owner/manager has complete control of business
  • Limited capital; Unlimited liability
  • Unlimited liability
  • Answers will vary
  • Decision or life of owner
  • Personal, gifts, borrowed, and others may vary