Business Ownerships
by: Savannah Cutlip
February 18, 2016
Second Period
Principles of Business and Finance
Main Types
Corporation
Advantages:
- easy to obtain money or capital
- stockholders (shareholders) have unlimited liability
- profits and earnings get taxed twice
- harder to form
In a corporation, there is limited liability for shareholders. An example of a corporation is Nike. A corporation could have unlimited lifetime but if they do not, the termination is decided by a charter or the article of dissolution. People can invest in a corporation when they buy stock. When they buy stock, they are called shareholders or stockholders.
Examples: Coca-Cola Company, Apple
Partnership
Advantages:
- easy to start
- amount of work and losses are shared
- limited lifetime
- hard to add partners
Examples: Eden Limited Partnership, Warner Bros
The Warner Bros were founded by Sam, Jack, Albert, and Harry Warner. They opened movie theaters and made movies in Pennsylvania.
Sole Proprietorship
Advantages:
- get taxed one time
- receive all the profits
- limited capital (money)
- limited lifetime of the owner
Examples: house cleaners, tutors
Types of Corporations
- Nonprofit Corporation- a corporation that benefits the public, free from taxes
- Examples: Goodwill, Red Cross, Salvation Army
- Domestic Corporation- chartered in one state
- Examples: Bank of America, Lowe's Home Improvement
- Foreign Corporation- doing business in one state but is chartered in another state
- Alien Corporation- doing business in a state but is chartered in another nation
- Public Corporation- created for the purpose of the government
- Examples: National Science Foundation, Export-Import Bank of the United States
- Private Corporation- created by people or individuals and the purpose is for business or charity
- Examples: Enterprise Rent-A-Car, American Cancer Society
Types of Partnerships
Limited- A Limited partner does not do work in the business but the public knows who they are and they have limited liability.
Secret- A Secret partner does do work in the business. The public does not know who they are though. They have unlimited liability.
Silent- A Silent partner doesn't participate in the business but the community knows that they are a partner in the business. They have unlimited liability.
Cooperatives
Franchise
Examples: McDonald's, Subway, Zaxby's