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Forms of Business Ownership. By: Courtney Boutarfa. Sole Proprietorship. A business owned and managed by one person, the proprietor. . Advantages. Disadvantages. Owner may lack the necessary skills and abilities to run the business Owner might lack capital

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Forms of business ownership

Forms of Business Ownership

By: Courtney Boutarfa

Sole proprietorship
Sole Proprietorship

A business owned and managed by one person, the proprietor.



Owner may lack the necessary skills and abilities to run the business

Owner might lack capital

Owner will bear the losses if the business fails

The business could be discontinued if the owner becomes sick or dies

  • Proprietor is entitled to all profits

  • Owner is their own boss

  • Free from red tape

  • Owner is quick with decision making

  • Owner usually knows employees and customers personally

  • Owner usually pays less income tax


A business owned by two or more people



Profits are shared between the owners

Disagreements can occur

Unlimited financial liability

Each partner bound by contracts of others

Uncertain life of the business

Difficulty in withdrawing from partnership

  • Easy to establish

  • Capital increased

  • Each owner may have the different necessary skills

  • Better credit reputation

  • Retirement

  • Operating expenses can be reduced

  • Pay less taxes than corporations


A business owned by a group of people and authorized by the state in which it is located to act as though it were a single person




Government regulations and reports

Stockholders records

Charter restrictions

  • Available sources of capital

  • Limited liability of stockholders

  • Permanency of existence

  • Ease in transferring ownership


Type of business that sells a good or service directly to the public. Examples are department stores or fast food places, etc.


A legal agreement in which a distributor buys the right to sell the franchising company’s product or service under the company’s name and trademark.

Franchisor-the parent company of a franchise agreement that provides the product or service

Franchisee-the distributor of a franchised product or service


Type of business that buys goods in large amounts and resells small amounts to all other businesses except the standard customer. For example, a beauty supply retailer can go buy all their products from a wholesaler and sell it in their shop for customers to buy. The beauty supply store’s customers cannot go buy from a wholesaler.


Businesses which acts as a link between producers and consumers in a channel of distribution.


The businesses that make finished products out of the raw processed goods that producers give them. Manufacturing is when machines and energy is used to create a finished product. Manufacturing includes design, sales, management and marketing


A business that collects all raw materials needed to create a product for another business.


Businesses that change raw goods into more finished products."Food processing plant" means a commercial operation that manufactures, packages, labels, or stores food for human consumption and does not provide food directly to a consumer .

Joint venture
Joint Venture

Agreement among two or more businesses to work together to provide a good or service.

Unlimited liability
Unlimited Liability

Unlimited liability means that the owner has full legal and financial responsibility for a business

Limited Liability Partnership & Company

LLC is a special type of corporation that is taxed as if it were a sole proprietorship or partnership.

Non profit organization
Non-Profit Organization

An organization that does not pay taxes and does not exist to make a profit. The profit made is put back into the business to operate and stay in business. These are places like schools and churches.

S corporation

Corporation that has between 1 and 100 shareholders and does not pay federal income taxes. The shareholders get dividend from the company and that is taxed as income.