Business Ownership

POBF 2.01

“Time is the friend of the wonderful business, the enemy of the mediocre.” — Warren Buffett, business magnate, investor

Noah Isaacs

2-18-16

2nd

POBF

Special Types of Ownership

There are three types of business ownership there is a Corporation, Partnership, and a Sole Proprietorship. Each type of ownership has its own advantages and disadvantages. But each type is better for a different type of business.

Corporations

There are one or more Share holders or Stock holders. A Corporation is often managed by a Board of Directors or other stock holders. The formation of a Corporation is made by an article of an incorporation with state government. This type of ownership more often benefits very large companies. An example of a corporation would be something like Facebook or even Best Buy.

Partnerships

A Partnership is owned by two or more people. The management is determined by the partnership agreement. The formation of a partnership varies between states with a partnership agreements. Partnerships are the most common type of ownership and is sometimes the hardest to keep stable because of disagreements between partners. Examples are Walmart, Google, and Ikea.

Sole Proprietorship

A Sole Proprietorship is owned by only one person. It is managed by mostly the owner himself unless he appointed a manager. This type of ownership is very common as well because it is the easiest to start and maintain. But this type of ownership can be problematic because the owner can be overwhelmed if the business becomes successful. Examples would be a Hair Salon or even a small restaurant.

Types of Partnerships in Businesses

There are different types and others vary some partners are inactive and others are secret from the public. Each different type of partnership serves a different purpose in each business or company.

A Dormant Partner

This type of partner is inactive within the company and is unknown to the public but this partner serves the purpose of only acting when he/she is need in the company. Which because he/she is a dormant partner there is an Unlimited Liability factor

A General Partner

A General partner is active and is known to the public as a partner and this type of partner is the most common in the types of partnerships there are. But this type of partner has unlimited liability which could cost the other partner money and further more damage the business.

A Limited Partner

This partner is not very active most of the time but is still known to the public as a partner in the business. But one advantage of this type of partner has a limited liability which could be helpful to the business and could extend the partnership which further extends the business's longevity.

A Secret Partner

This partner is active with in the business but is not know to the public as the official partner which is not very common with in businesses. But this could increase productivity with this partner since he/she is not having to deal with public affairs or other public business matters. But this partner does have unlimited liability which could be a problem and could cause the business or corporation problems.

A Silent Partner

This type of partner is not very active but is still know to the public. The role of this partner is to often only to participate when there are serious matters and often does not make public appearances. This type of partner still has unlimited liability because he/she is still unpredictable within the business.