Business Structures

Sole Proprietorship

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Characteristics

* one owner who keeps all profits

* most popular type of business in America

* one tax structure

* options to protect personal assets


Advantage

* ease of entry with no fees


Disadvantage

* unlimited liability

Partnership

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Characteristics

* less common

* mutiple kinds

* work with strengths and weaknesses

* audit


Advantage

* prime credit standing


Disadvantage

* chances of dispute

Corporation

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Characteristics

* stockholders own corporation

* endless life

* centralized management system

* ownership changes based on stockholders

* enter into contractual agreements on their own behalf


Advantage

* additional capital can be raised through stocks


Disadvantage

* complex to start up

Franchise

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Characteristics

* sell goods on behalf of company

* grants a licence to another person or business permission to use their business idea

* must have a license to sell goods or services

* get commission for amount of goods or services sold


Advantage

* relationship between suppliers is already established


Disadvantage

* usually has restrictions on how you run your business

Non-Profit

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Characteristics

* no one owns shares

* no income for workers- money goes back into company

* board of directors or trustees have control

* must file a IRS firm 990




Advantage

* employee commitment


Disadvantage

* limited funding