4 Types of Business Ownership
Information & More
Sole proprietorship
Explaination
Advantages
-Easy to set up
Disadvantages
-Your business doesn't exist as a separate legal entity.
Rules
- The personal assets of the sole proprietor and the business assets are one and the same for liability purposes
-Protection is important because claims against the business could result in seizing of a home or other assets.
Facts
-Can engage in any form of legal business activity any time and anywhere
Examples
-Housekeeping
-Tutors
Partnership
Definition
Advantages
-More capital is available for the business.
-Two heads is better than one
Disadvantages
-Each partner is liable for their share of the Partnership debts as well as being liable for all the debts
Rules
-Brand
-Distribution
Facts
-An Active Partner participates in the day-to-day operations of the business.
Examples
- HP
-Intel
-Mcdonalds
Limited Liability Partnership
Definition
Advantages
-Tax Advantages
-Flexibility
Disadvantages
-Limited liability partnerships are not recognized as legal business structures in every state
Rules
Facts
-Allows flexibility between partners
Examples
-Assets
Corporation
Definition
Advantages
-Corporations may be able raise additional funds by selling shares in the corporation.
Disadvantages
- Forming a corporation requires more time and money than forming other business structures.
- Governmental agencies monitor corporations, which may result in added paperwork.
Rules
-Register relating to trustees for debenture holders
Facts
-Dominate the global economy
Examples
-M&M's