Ownership
Four Major Types of Business Ownership
Sole Proprietorship
- business owned by one person
- complete control and decision making power
- no corporate tax payments
- receives all profits
- simple and inexpensive to make
- accepts all the risk
- personally liable for all debts and court judgments
- sole ownership
- can hire employees to help manage
- quarterly tax payments
http://www.encyclopedia.com/topic/Sole_proprietorships.aspx
Examples:
- Catering Company
- Tutoring
- Home Healthcare
Partnership
- business with two or more owners who share in the decisions,assets, liabilities, and profits of the business
- General partnership: every partner is involved in the management of the firm
- Limited partnership:some partners are passive investors/don't manage the operations of company
- share decisions and risks
- simpler adn less expensive to create than any other form of business
- general partners are held personally liable for business debts and obligations
Policies and Regulations:
- clearly define what partner has what power
http://smallbusiness.chron.com/rules-partnership-agreement-24228.html
Examples:
- Google
- Apple
- Twitter
Corporation
- a business that is registered by a state and operates apart form its owners
- limited liability it provides to the shareholders
- if the business has debts that it cannot pay, shareholders aren't liable
- owner to protect their personal assets
- double taxation
- complex and expensive to set up
- C Corporation: business that pays taxes on earnings
- Subchapter S corporation: corporation that is taxed like a partnership
- Income passed through share holders
- American Airlines
- Taco Bell
- Statefarm
Limited Liability Company (LLC)
- not a partnership or corporation
- owners called members, have the same liability protection of a corporation
- same liability protection as a cooperation
- losses, profits, and expenses flow through the company to individual members avoiding the double taxation of a corporation
- dissolves when a member dies or undergoes bankruptcy
- regulations vary through each state
- members agree to profit distribution
http://smallbusiness.chron.com/limited-liability-company-regulations-4981.html
Citations
"Advantages and Disadvantages of Sole Proprietorship." New York Times. N.p., n.d. Web. 17 Sept. 2014.
"Rules and Regulations for a Sole Proprietorship." Business & Entrepreneurship. N.p., n.d. Web. 19 Sept. 2014.
Maxwell, G., "Sole Proprietorship." Encyclopedia of Small Business. 2007, "Proprietary Colonies." American Eras. 1997, "Sole Proprietorship." West's Encyclopedia of American Law. 2005, and "Sole Proprietorship." Gale Encyclopedia of U.S. "Sole Proprietorship."Encyclopedia.com. HighBeam Research, 01 Jan. 2007. Web. 19 Sept. 2014.
"Rules of a Partnership Agreement." Small Business. N.p., n.d. Web. 19 Sept. 2014.