Types of Business Ownership
By: Macy Carrick
2/18/16
2 period
Business and Finance
Special Types of Ownership
Types of Partnerships
- Dormant: not active, unknown, unlimited liability
- General: active, known, unlimited liability
- Limited: not active, known, limited liability
- Secret: active, unknown, unlimited liability
- Silent: not active, known, unlimited liability
- S- Corporation: treats partners as individuals by taxing them once
- Limited Liability Company (LLC): provides limited liability for owners
- Nonprofit Corporation: a group of people who join to do some activity that benefits the public (example- Goodwill)
- Domestic: chartered in a specific state
- Foreign: chartered in one state but doing business in another state
- Alien: chartered in another nation but doing business in a state
- Public: established for a governmental purpose
- Private: established by individuals for business or charitable purposes
*Franchise-permission to operate a business to sell products and services in a set way (examples: McDonald's, Burger King)
Corporations
- 1 or more owners
- managed by a board of directors
- started by filing the articles of incorporation
- advantages: limited liability for shareholders, life of the corporation is unlimited
- disadvantages: double taxation, increased government regulations ans legal restrictions
- limited liability
- examples: Dr Pepper, Starbucks, Wendy's
- unlimited lifetime
- shareholders and purchase of stock
- example: Sonic
Partnerships
- 2 or more owners
- dormant, general, limited,secret, silent
- managed by a partnership agreement
- started by a written agreement
- advantages: shared risk, shared management responsibilities
- disadvantages: shared profits, unlimited liabilities
- unlimited liability
- examples: Netflix, ESPN
- actions of the partners, bankruptcy, death, and/or court order
- example: Sears
Proprietorship
- 1 person
- may be owner; owner participates in all day-to-day operations
- begin buying and selling goods or services; may vary by state
- advantages: easy to form; complete control
- disadvantages: limited capital; limited lifetime
- unlimited liability
- Lloyd's, McCurry Restaurant
- decision or life of owner
- personals of partner(s), gifts, borrowed and others may very
- example: The Sole Proprietor Seafood Bar