Business Types

by: Camille Bradely

Sole Proprietorship

  • A sole proprietorship is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner.
  • Advantages: easy and inexpensive to form, complete control and easy tax preparation.
  • disadvantages: unlimited personal liability, hard to raise money and heavy burden
  • Policies to follow: You need yo obtain the necessary licenses and permits. Regulations vary by industry, state and locality.
  • Facts: Because you and your business are one and the same, the business itself is not taxed separately-the sold proprietorship income is your income.
  • You do not have take any formal action to form a sole proprietorship.


  • A partnership is a single business where two or more people share ownership.
  • Advantages: easy and inexpensive, shared financial commitment, complementary skills and partner incentives for employees
  • disadvantages: shared profits, disagreement among partners, and joint and individual liability
  • policies: To form a partnership, you must register your business with your state, a process generally done through your Secretary of State’s office
  • facts: For partnerships, your legal name is the name given in your partnership agreement or the last names of the partners
  • theirs three types of partnerships: general partnership, limited partnerships and joint ventures.
What is a Limited Liability Partnership?


  • A corporation is an independent legal entity owned by shareholders.
  • Advantages: Limited Liability, Ability to generate capital, corporate tax treatment, and attractive too potential employees
  • Disadvantages: Time and money, double taxing and additional paperwork.
  • policies: A corporation is formed under the laws of the state in which it is registered. To form a corporation you’ll need to establish your business name and register your legal name with your state government. To register your business as a corporation, you need to file certain documents, typically articles of incorporation, with your state’s Secretary of State office.
  • facts: Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements.
  • For businesses in that position, corporations offer the ability to sell ownership shares in the business through stock offerings
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"Corporation | The U.S. Small Business Administration |"Corporation | The U.S. Small Business Administration | N.p., n.d. Web. 19 Sept. 2014.