Business Ownership

Types

Manufacturer (produce)

Merchandise (sell)

Service (provide)

Nonprofit (no money)

Business Ownership

Sole proprietorship

Partnership

Corporation

Legal entity

Organization or person that has legal rights or obligations

Have contracts

Assets 

Can be sued 

Or sue

Unlimited Liability

Owners of the business handles all the debts liabilities of the business and are personally responsible

-Sole proprietorships (single owner businesses).

• General partnerships (unless structured with limited liability provisions).

Limited liability

Liability is limited financial reponsibility is capped in what you invested

Business Organization types

Sole proprietorship

Partnership

Corporation

Sole proprietorship

Pros: Owned by individual

Self employed

Low start up cost

All profits to owner

All decisions made personally

Cons:

Income taxed personal

Unlimited liability

Difficult to raise capital

General Partnerships

A general partnership is a business owned by two or more people

Share management responsibilities,

Share profits and losses, and

Have unlimited liability for the debts of the businesses

Pros: Easy startup

Shared responsibility and Finance

Cons:

Unlimited liability

Taxed personally

Limited Partnerships

• Invest money into the business but don’t take part in daily management.

• Have limited liability (can only lose what they invested).

Pros:

Limited liability

Easier to raise capital

Cons:

No say in daily management