Types of Businesses
Proprietorships, Partnerships, and Corporations
- full pride in owning the business
- receives all the profits
- unlimited liability- responsibility for all debts and damages
Sole proprietors have to find Financial Capital, which is the money it takes to run a business
A Partnership is a business that two or more people own and run.
- Articles of Partnership is a document which identifies how much money each person will contribute and what role they will play in running the business.
- Pride in sharing ownership of a business
- More ways to raise money
- Special talents from each individual
- More efficient operations
- More complex- new agreement has to be made if someone drops out
- Owners have unlimited liability- each owner is fully responsible for the debts they produce
A Corporation is an organized business recognized by law that has many of the rights and responsibilities of an individual.
- Charter- a government doc granting permission to organize
- Stock- ownership shares of the corporation
- Stockholders- part owners of the corporation. They use money received rom selling the stock to set up and run the business
- Ease of raising financial capital
- Can grow to be large businesses
- Expensive and complex
- Very little say in business decisions
- More regulation by the government