Types Of Businesses

Proprietorships, Partnerships and Corporations



-Operated by a sole or single person.


-Full pride in owning the business -Receives all profits.

-They can also make decisions quickly without having to consult or check with a co-owner or boss.


-Unlimited liability, or complete legal responsibly for all debts and damages arising from doing business.

-Also find it difficult to raise financial capital needed to run and grow a business.

-Difficultly attracting qualified employees.



-A business that two or more people own and operate.

-Legal document: Articles of partnership- identifies how much money each of you will contribute, profits and losses, even to close down.


-Pride of sharing ownership in a business. -Raise more money.

-If money cant be borrowed more partners can be added.

-No corporate income tax. -Each owner often brings special talents to the business.

-Slightly larger size which gives more efficient operations.


-Legal structure is more complex. -When a partner is added or removed a new agreement has to be made.

-Owners have unlimited liability. -Each owner is fully responsible for all debts.

-If one cannot pay part of damages you are expected to pay full.



-Organized business. -Must get a charter to start.

-Specify the amount of stock and ownership shares in the company.

-People who buy stock are the stock owners.

-Stockholders are part owners when they buy stock.

-Used to set up and run the business.


-Ease of rising financial capital. -Easier to borrow large sums of money.

-Ability to grow huge. -Board or directors can hire professional managers to run the business. -Ownership can be easily transferred.

-Limited liability- only the corporation is responsible for debts of the corporation


-Expensive and complex to set up. -Business owners have very little say in management.

-Subject to more regulation by the government than any other form of business.

-Stockholders are subject to double taxation or paying taxes twice on corporate profits.