DIFFERENT TYPES OF BUSINESSES

SOLE PROPRIETORSHIP

• A business owned exclusively by one person

ADVANTAGES

• Government exercises very little control
• Get to make all decisions
• Get to keep all profits

DISADVANTAGES

• Difficult to raise money
• Bear burden of all risk
• If it fails, you're left with all debts

PARTNERSHIP

• Business owned by two or more people

ADVANTAGES

• Will not have to come up with all of capital
• Any losses will be shared
• Partners offer different expertise in different places
• Very little government regulation

DISADVANTAGES

• Have to share responsibilities and profit
• Held legally for partner's mistakes
• Lead to disagreements

CORPORATION

• Business that has the legal rights of a person but is independent of its owners

ADVANTAGES

• Liability: assets won't be taken to pay
• Money can be raised by selling stock
• Main shareholder can change without disrupting anything else

DISADVANTAGES

• Very complicated to set up
• Costly

LIMITED LIABILITY

• Provides benefits of partnership taxation and limited personL liability

ADVANTAGES

• Easier to run
• Owners known as members
• Can participate in management

DISADVANTAGES

• Limited by state law
• A single owner cannot established one
• Limited life by state