Types Of Business Ownerships

2.01

Sole Proprietorship

Advantages

Run by one person

Easy to start up

Owner/Manager has complete control

One time taxation

Disadvantages

Limited capital (money)

Unlimited liability (responsible for ALL dept)

Partnership

Owned and controlled by two or more people

Partnership

Advantages

More capital and credit available than a sole proprietorship

Combined resources (money, experties)

Shared management

Shared risk

Work load easier to manage

Disadvantages

Shared are shared

Responsible for each others decisions

Potential for disagrement

Corporations

Advantages

Easier to obtain capital

Limited liability for shareholders

Life of the corporation is unlimited

Disadvantages

Double taxation

Increased goverment regulations and legal restrictions

Cooperatives

Owned by members, serves their needs and is managed in their interest

Purchased goods and services cheaper as a group than as individuals

Greater bargoning power then as individuals

Franchise

Permission to operate a business to sell products and services in a set way

Franchiser: the company that owns the product

Franchisee: the company purchasing the right to run the business

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