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Forms of Business Ownership

By Gustavo Lucio. Forms of Business Ownership. Sole Proprietorship. This type of ownership is for people who want to make all of their business decisions independently. This type of ownership has little regulation from the government.

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Forms of Business Ownership

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  1. By Gustavo Lucio Forms of Business Ownership

  2. Sole Proprietorship • This type of ownership is for people who want to make all of their business decisions independently. • This type of ownership has little regulation from the government. • One of the downsides of this type of ownership is that there is a great risk to the owner’s investment.

  3. Partnership • This type of ownership is for people who like to work with other people because it is owned by two or more people. • This is where partners share an idea for a business and want to cooperate in managing, investing, and want to share the risks and rewards of the business.

  4. Corporation • This type of ownership is a separate legal entity owned by one or more shareholders and managed by a board of directors. • This type of ownership is more difficult to form. • It is also subject to more regulation. • One of the advantages is that investors have limited liabilities.

  5. Limited Liability Partnership & Company (LLC) • This type of ownership is where you avoid double taxation like a partnership or a sole proprietorship and get the limited liabilities of a corporation. • The owners report the taxes on their own personal income tax returns, the LLC is not a taxable entity. • With an LLC the owner or owner’s are not personally liable for any debts if the company

  6. Joint Venture • This type of ownership is where people or firms combine skills and or resources for a complex project. • In here the owners don’t transfer their ownerships but they do share the profits. • It is usually to be more competitive in their market or to get into other markets that they couldn’t get into before.

  7. Franchise • This type of ownership is where one or more people purchase or lease the rights to sell a product or service. • Franchises are a good way to start a business because you don’t have to go through the marketing hassle of establishing a brand. • One down side of having a franchise is that you have to share the profits.

  8. S-Corporation • This type of ownership is a corporation that is governed by sub chapter S of the internal revenue code. • Under this code, earnings and taxes are treated at the individual owners level. • This means that taxes are reported through the shareholders own personal income tax returns.

  9. Non-Profit Organization • In this type 0f ownership the profits are used to pursue its goals. • These types of organization are in some countries exempt from paying income and property taxes. • There is really not an owner it is controlled by board members. • These people cannot sell their shares to anyone or benefit from it in any taxable way.

  10. Cooperative • This is where two or more people or firms come together to share resources. • This is a business that is owned equally by the people who are employed by it and use its services.

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