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Types of Businesses

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Introduction

First Name Last Name Professor Name Course Code/Name 06 August 2010 The types of businesses One or more persons may own a business. Businesses are categorized according to who owns them and the specific way they are organized. "Selecting the type of ownership to start a business" is very important, because every type of business has its own way and rules to run. There are three basic types of business ownership: sole proprietorship, partnership and corporation. Here we will discuss that how these types of business are formed and what are the advantages and disadvantages of each. 1. Sole Proprietorship It is the type of business which is owned and generally operated by the single person. ...read more.

Middle

2. Partnership The U.S Uniform Partnership Act defines a Partnership as a voluntary association of two or more persons to act as co owners of a business for profit. There are some types of partnership. a. General partnership: It means a business co owned by two or more general partners who are liable for everything the business does. b. Limited partnership: It is a type of business co owned by one or more general partners who manage the business and limited partners who invest money in it. c. Master limited partnership: It is a special type of business partnership that is owned and managed like a corporation but often taxed like a partnership (Haag, ) The advantages of partnership includes: ease of start up, availability of capital and credit, personal interest, combined business skills and knowledge, retention of profits and no special taxes. ...read more.

Conclusion

The shares of the ownership of a corporation are called stock and the people who own a corporation's stock and thus own part of the corporation are called stockholders or shareholders. Once a company has been formed it can sell its stock to individuals or other companies that want to invest in the corporation. When the stock is owned by relatively few people and is not sold to the general public, it is known as closed corporation, in opposite in open corporation, the stock can be bought and sold to any individual (Winston & Jay, 2010). The advantages of corporation are limited liability, ease of raising the capital, ease of transfer of ownership, centralized management, employee benefit plan, choice of tax year and perpetual life. The disadvantaged of corporation are corporate formalities, reporting requirements, taxation, and different type of fees payable by the corporation. ...read more.

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