Ownership Structures Types of Business Ownership Sole proprietorship

Ownership Structures

Types of Business Ownership Sole proprietorship Partnership Corporation LLC

Sole Proprietorship Owned by one person Small business Jewelry stores Restaurants Hair-styling salons Physicians Attorneys Accountants Supplies Advertising Rent Taxes Owner pays for everything Use personal savings or borrow More than two-thirds of U. S. business Proprietor has complete responsibility for business decisions Unlimited liability—full responsibility for your company’s debts May need only a license or permit to start your sole proprietorship

Partnerships Owned and managed by a small group-2 or more Share the risks and rewards Written agreement (contract) Unlimited liability for the debts of the partnership License to start Pay taxes only on personal profits Easier to obtain capital Different skills of partners All partners equally responsible for bad decisions of one partner

Corporations People become owners by buying Owned by a number of shares of stock--shareholders Corporation is treated as one people and operated person under written permission (Certificate To raise money, you can sell shares of ownership of Incorporation) from the state in which it is located Each share gets a portion of the profit and a vote on business operations Board of directors control the operation Hire officers to run the business

Corporations, con’t. Limited liability is the major advantage Personal property and savings are not at risk Owners can sell their shares and the business does not change or end Sell new shares to raise more capital Corporations often have to pay more taxes Owners are taxed on their income Corporation pays taxes also (double taxation) Government closely regulates corporations More difficult to start and run a corporation

Limited Liability Company Combines elements of corporations, partnerships and sole proprietorships Any entity can be an owner, including individuals, corporations, partnerships or trusts "limited liability" aspect stems from the protection an LLC organization offers its owners Advantages Personal property of owner is protected Owner is still able to claim a profit or loss on personal tax returns Fewer restrictions than corporation

E-Commerce Buying and selling goods and services via the internet Reach customers anywhere in the Keep a record of you world receipts, order confirmations, and Catalogs on the internet save big merchant’s Internet address money in printing and mailing Web Trust is assurance Consumers can shop 24/7 service that combat security Privacy of the customer is of and privacy issues when concern conducting shopping, Be careful where you shop banking, and other online transactions.