Business Ownerships

by: Savannah Cutlip

Savannah Cutlip

February 18, 2016

Second Period

Principles of Business and Finance

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Main Types

There are different types of business ownership's. We will be talking about all of them. The main types are sole proprietorship, partnership, and a corporation.

Types of Corporations

There are many different types of corporations. One type of corporation is a Subchapter Corporation or an S Corporation. What this corporation does is it taxes the partners of the corporation only once. To be able to have an S Corporation, you must follow rules like you can only have 75 stockholders and no more than that. Also, stockholders have to be citizens of the United States. An example of an S Corporation would be real estate agents, and certified public accountants. Another corporation is the Limited Liability Corporation. This corporation gives owners limited liability. An advantage of the Limited Liability Company is that it protects your personal assets and a disadvantage is that it has a limited life.



  • Nonprofit Corporation- a corporation that benefits the public, free from taxes
  1. Examples: Goodwill, Red Cross, Salvation Army


  • Domestic Corporation- chartered in one state
  1. 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
  1. 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
  1. Examples: Enterprise Rent-A-Car, American Cancer Society

Types of Partnerships

There are five types of partnerships. One type of partner in a partnership is called a Dormant partner. This type of partner does not participate in the business and the people in the community do not know about that partner. Dormant partners have unlimited liability. Another is a General partner. A General partner does do work in the business and the community knows who it is. They also have unlimited liability. Here are some more types of partners in a partnership:


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

A cooperative is a type of business ownership that is owned by members. People that have cooperatives do it in their interest. It is cheaper to purchase goods and services cheaper as a group rather than just one person. They have better bargaining power than one person would have.

Franchise

A franchise is a type of business ownership that has to get permission from the person that owns the business to sell its products and services in another area. It begins with the head company who is in charge or owns the product or service and lets the other business have the right to sell the parent company's product or service. A franchiser is the company who owns the product. The franchisee is the company buying the right to run the business at another location.

Examples: McDonald's, Subway, Zaxby's

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