BUSINESS, MANAGEMENT, AND ENTREPRENEURSHIP

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BUSINESS, MANAGEMENT, AND ENTREPRENEURSHIP
2.04 Explain the types of business ownership
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Sole proprietorship
A business owned and operated by one person

• Taxed less
• Unlimited liability
• Easy to start

3
Partnership
A legal agreement between two or more people to
be jointly responsible for the success or failure
of a business
4
Partnership

• Combines the skills of the owners
• Easy to start
• Owners may not always agree
• Unlimited liability
• Business is dissolved if one owner dies

5
Partnership
General Partnership Each partner shares in the
profits and losses Limited partnership Each
limited partner is liable for any debts only up
to the amount of his or her investment in the
business
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Corporation
A business that is chartered by the state and
legally operates apart from the owner(s). It is
the most complicated form of business ownership.
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Corporation

• Complex formation
• Government regulations
• High taxes
• Complex accounting and record keeping

• Limited liability
• Easy to raise money
• Easy to enter or leave the business
• Professional management by experts

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Corporation
Stockholders
People who own the corporation. Stockholders
have limited liability.
9
Corporation
Foreign Corporation
A business incorporated under the laws of a
different state from the one in which it does
business
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Corporation
Subchapter S Corporation
A small business that is taxed like a partnership
or proprietorship