Business Ownership

Kyle Osterhout

Sole proprietorship

A sole proprietorship is a business that is run by a single individual who makes all the decisions, although the proprietor may engage employees.

Advantages

Sole proprietorship is the simplest and most flexible business structure.

The sole proprietor has total control and full decision-making power over policies, profits and capital investment.

Disadvantages

Risks that are taken by the sole proprietor may result in personal bankruptcy.

The death or prolonged illness of the sole proprietor will lead to the end of the business.

Partnership

A partnership is the relation which subsists between persons carrying on a business in common with a view of profit.

Advantages

each partner in a partnership is personally liable for the acts of the other partners and for all of the debts of the company. On the other hand, all partners are entitled to share in the profits of the company equally unless they agree otherwise.

Disadvantage

Partners do not have the benefit of limited liability.

Franchise

Successful franchisees are risk averse. They are willing to take some risk but want that risk to be as small and controlled as possible

Advantages

Entrepreneurs have an almost uncontrollable urge to reinvent the wheel based on their incredible confidence in their ability to figure out how things should be done to maximize results. Successful franchisees, on the other hand, want proven systems. They don't want to have to figure out the best way to do something. They want a system of operation that tells them the best way to do anything associated with the business

Corporation

A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. A corporation is treated as a “person” with most of the righ

Advantages

Generally, a corporation's shareholders are not liable for any debts incurred or judgments handed down against the corporation.

Disadvantages

Forming a corporation requires more time and money than forming other business structures.

Non for profit

the term nonprofit because these organizations are not set up for the sole purpose of making a profit. Rather, they pursue public benefit purposes that are recognized under federal and state law.

Advantages

Eligibility for public and private grants: Nonprofit organizations are allowed to solicit charitable donations from the public. Many foundations and government agencies limit their grants to public charities.

Disadvantages

Creating a nonprofit organization takes time, effort, and money. Because a nonprofit organization is a legal entity under federal, state, and local laws, the use of an attorney, accountant, or other professional may well prove necessary