Types of Businesses Sole Proprietorships Partnerships Sole Proprietorships

Types of Businesses - Sole Proprietorships & Partnerships-

Sole Proprietorships • These are the majority of businesses that are owned. • Most consist are only one self-employed person, but sometimes they hire workers. • They make up 72% of businesses, but only 4% of business sales.

Sole Proprietorships - Advantages and Disadvantages • Advantages – Easy to start – Few government regulations – Complete control over the business – Owner keeps all of the profit – Lower taxes – Pride of ownership

Sole Proprietorships - Advantages and Disadvantages • Disadvantages – Unlimited personal liability – Difficulty raising financial capital – Limited life – Difficulty finding and keeping good workers – Broad Responsibility

Partnerships • A business that involves two or more individuals who contribute resources to the business in return for a share in the profits. • They make up 10% of businesses and 14% of business sales.

Types of Partnerships • General Partnership – Partners share in the responsibility of both running the business and in any liability from its operation. • Limited Partnership – At least one person actually runs the business and has unlimited liability, while other partners provide financial capital but have limited liability.

Partnerships - Advantages and Disadvantages • Advantages – Easy to start – Few government regulations – Shared decision making and increased specialization – Greater ability to raise financial capital – More able to attract and retain workers – Lower taxes

Partnerships - Advantages and Disadvantages • Disadvantages – Unlimited personal liability – Limited life of the business – Partners may disagree – Profits must be shared