TYPES OF BUSINESS OWNERSHIPS

2.01

SOLE PROPRIETORSHIP

Advantages:


  • Run by one person
  • Managed by the owner
  • Easy to start up
  • Complete control
  • Owner receives all profits
  • One time taxation means limited taxes


Disadvantages:


  • Limited capital
  • Unlimited liability
  • limited to lifetime of the owner

PARTNER

Advantages:


  • more capital and credit available than a sole proprietorship
  • combined resources (money.expertise)
  • shared management responsibilities
  • shared risk
  • work load easier to manage than a sole proprietorship


Disadvantages:


  • Shared profits
  • Responsible for each others decisions
  • Potential for disagreement among partners
  • Unlimited liability
  • Limited to lifetime of the partnership
Big image

CORPORATIONS

Advantages:


  • easier to obtain capital
  • Limited liability for shareholders
  • Life of the corporation is unlimited


Disadvantages:


  • Double taxation
  • Increased government regulations and legal restrictions
  • Decision-making shared among board of directors and shareholders
Big image
Big image

FRANCHISE

  • Permission to operate a business to sell products and services in a set way\
  • Begins with a parent company who owns the product or service and grants the right to another business
FRANCHISER: THE COMPANY THAT OWNS THE PRODUCT

FRANCHISEE: THE COMPANY PURCHASING THE RIGHT TO RUN THE BUSINESS

COOPERATIVES

  • Owned by members, serves their needs and is managed in their interest
  • Purchase goods and service cheaper as a group than as individuals
  • Greater bargaining power than as individuals