Types of Business Sole Proprietorship, Partnership, Corporation
Sole Proprietorship A: Business owned and operated by one person B: Advantages Make decisions quickly Keep all profits Least regulated form of business Requires full financial capital to start and operate business 72% of businesses are sole proprietorship ( these are the small businesses that are the engine that drives the economy)
Sole Proprietorship/Disadvantages Unlimited liability: complete legal responsibility for all debts and damages arising from doing business. Difficult to raise financial capital-investment money to start, operate, or expand the business. Might be difficult to attract qualified employees
Partnership Two or more people own and operate a business. Partners create legal document to share profits, liability, and responsibilities. Two types of partnerships- General Partnership- all partners are responsible for management and financial obligations. Limited Partnership- not all partners have equal liability, management, or investment of capital
Advantages and Disadvantages Advantages: Specialization of partners, easier to manage as it grows Easier to raise capital No corporate income tax Disadvantages: Complex legal structure; often disagreements Unlimited liability among partners