Business Types

Proprietorships, Partnerships, and Corporations

Proprietorships

-This is a business owned by a single person

Advantages:

-full pride in owning the business

-receives all the profits

-can make decisions quickly, without having to consult a boss or co-owner

Disadvantages:

-ultimate liability

-personal assets at risk

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Partnerships

-This is a business between two or more people; they have a legal agreement that spells out how they will share profits and losses.

Advantages:

-pride of sharing ownership in a business

-raise more money with more owners

-can bring in new partners to provide funds

-each partner can bring a different talent to the table to improve the business

slightly larger in size=more efficient in operation

Disadvantages:

-legal structure is complex

-the owners have ultimate liability

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Corporations

-This is an organized business recognized by law through a charter that has many of the rights and responsibilities of an individual.

Advantages:

-money is raised easily

-grow faster

Disadvantages:

-expensive and complex to set up

-business owners have little to do with the management of the business

-subject to more regulation by the government

-stockholders are subject to double taxation