SOLE PROPRIETORSHIP PARTNERSHIP CORPORATION Types of Business Ownership.
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Transcript of SOLE PROPRIETORSHIP PARTNERSHIP CORPORATION Types of Business Ownership.
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SOLE PROPRIETORSHIP
PARTNERSHIP
CORPORATION
Types of Business Ownership
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Making the Decision
When a person decides to start their own business they first must decide how the
ownership of their business will be legally organized.
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The Choices
Sole Proprietorship – a business owned by one person.
Partnership – a business owned by two or more
people.Corporation –
a business that operates as a legal entity that is separate form its owners and is treated by law as if it were an individual person.
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Sole Proprietorship
One ownerOldest and most common type of
ownership75% of all businesses organized today
in the U.S.Most are small businessesStarted by entrepreneursMany are service based
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Sole Proprietorship - Advantages
Easy to Set-UpSimple LicensingFew Government RegulationsTotal ControlProfits to OwnerProfits Taxed Once
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Sole Proprietorship - Disadvantages
Limited CapitalUnlimited LiabilityLimited Human ResourcesLimited LifeHigh Income Taxes
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Partnership
Business owned by two or more people
Partnership agreementPartners decide how to divide profits5% of all business organized in the U.S. today
Some become CorporationsGeneral Partner/Limited Partner
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Partnership - Advantages
Easy to Set-UpMore Skills and KnowledgeAvailable CapitalTotal Control by PartnersProfits Taxed Once
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Partnership - Disadvantages
Unlimited LiabilityPossible Disagreement Among Partners
Shared ProfitsLimited Life