Business Structures
Sole Proprietorship
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
* less common
* mutiple kinds
* work with strengths and weaknesses
* audit
Advantage
* prime credit standing
Disadvantage
* chances of dispute
Corporation
* 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
* 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
* 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