Types of Businesses

Tat'ana Dillard-Sims

Proprietorship

Structure-A proprietorship is a business owned by a sole, or single person. For example beauty salons, cleaners, and pizza restaurants.


Advantages-The proprietor has full pride in owning the business and receives all profits.

The proprietor can makes decisions quickly, without having to consult, or check with, a co-owner or boss.


Disadvantages-The proprietor has unlimited liability, or complete legal responsibility for all debts and damages arising from doing business, If the business has debts, the owner's personal assists, such as houses, cars, and jewelry, may be seized to pay debts.

Partnership

Structure-A partnership is a business that two or or more people own and operate.


Advantages-The pride of sharing ownership in a business. Partnerships usually raise more money. If money cannot be borrowed, the parners can always take in new partners to provide funds. Each owner often brings special talent to the business. Slightly larger sized businesses.


Disadvantages-Legal structure is complex. The owners have unlimited liability.

Corporations

Structure-An organized business recognized by law that has many of the rights and responsibilities of an individual.


Advantages-Ease of raising financial capital. Corporations can grow to be huge.


Disadvantages-Expensive and complex to set up. Millions of people own the shares of major corporations, but it is difficult for them to unite to force the managers to act in a particular way. Corporations are subject to more regulation by government than the other forms of business. They must release certain reports on a regular basis.