2.01 Types of Business Ownership

By: Chase Lowery 2/17/16 POBF 3rd period

Special Types of Ownership

-A type of specialized partnership is a limited liability partnership; identifies some investors who cannot lose more than the amount of their investment.

-A type of cooperative is a sub chapter s; treats partners as individuals by taxing them once.

-A franchise is when permission is granted to operate a small business to sell products and services in a set way. some examples of a franchise include Burger King and Mcdonalds

Proprietorship

-one owner

-managed by owner

-starts by selling goods and services

-some advantages are its easy to start and you can have complete control of the business

-some disadvantages include limited capital and the business has a limited lifetime depending on the owners life

-unlimited liability

-ownership is determined on the owners life or their decision

-sources of investment are personal, gifts, borrowed and other options

Partnership

-two or more owners

-who manages is determined by the partnership agreement

-business starts of with a partnership

-two advantages is that its easy to start up and the work load is shared

-two disadvantages are shared profit and decisions are made jointly

-unlimited liability depending on partnership type

-ownership is determined by actions of partners, bankruptcy, death, etc

sources of investment are personals of the partners gifts, borrowed and other options

corporation

-owned by one or more shareholders who have one vote per share

-managed by managers, board of directors, and shareholders

-starts by filling of an article of incorporation

-two advantages are capital is easy to obtain and unlimited lifetime

-two disadvantages are double taxation and government regulation

-unlimited liability

-may have unlimited lifetime

-sources of investment is the purchase of stocks