© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 4 McGraw-Hill Sole Proprietorships One person Advantages –Easy to start, easy out; you are your our own boss; you retain all profit; and no special federal taxes Disadvantages –Limited financial resources; skill gaps; unlimited liability; lack of fringe benefits; a limited lifespan Types of Business Ownership

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5 McGraw-Hill Partnerships General partnership Limited partnership –General partner –Limited partner –Limited liability Master limited partnership (MLP) Limited liability partnership (LLP) Types of Business Ownership

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 6 McGraw-Hill Partnerships Advantages: –More financial resources and pooled knowledge Disadvantages –Division of profits; unlimited liability for each general partner; conflicts among partners; difficult to get out of the relationship Types of Business Ownership

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 7 McGraw-Hill Corporations Corporate governance Board of directors C-Corporations –Owners not liable for debts S-Corporations –Government created, taxed like sole proprietor Limited Liability Corporations (LLCs) –Ownership rules are flexible; cannot sell stock; more paperwork; double taxation Types of Business Ownership