Ricky Cho

Period 6

Business type assignment

Sole proprietorship- A business owned by one person. The owner of the business has total and
unlimited personal liability of the debts incurred by the business

Partnership- Form of business in which two or more people operate for a common goal of making
profit. Each partner has total and unlimited person liability

Limited liability company- Form of for-profit incorporated company where ownership is divided into
shares and governing rules are set forth in contrasts by initial shareholders

Unlimited liability company- Private firm whose owners accept personal and unlimited liability for its
debts and obligations in return for avoiding double taxation of a limited company.

Corporation- Is a for-profit, limited liability entity that has separate legal personality from its members.
Owned by any shareholders and overseen by a board of directors.

Sole proprietorship example- Corner grocery store, Local hair salon, etc.
Partnership example- Law firms, Accounting firms, etc.
Limited liability example- Law firms, Accounting firms, etc.
Unlimited liability company example- Law firms, Accounting firms, etc.
Corporation example- McDonald, IBM, etc.

Pros
Sole Proprietorship -Easy to form
-Control of profits
-Control of decision making
Partnership -Shared cost of start-up
-Shared responsibilities and
work
-Shared business risks and
expenses
Cons
-Unlimited liability
-Fragile business existance
-Less professional appearance
-Partners are jointly and
individually liable for business
activities of the other
-Shared profits
-Don't have total control of
business

Limited Liability -Flexible management -More paperwork in comparison

Unlimited Liability
agreements to partnership
-Freedom regarding allocation of -LLC can exist for certain
income amount of time in certain states
-Only assets of business is at risk -Not many legal standards set yet
- No double taxation -Owners personal asset risk
-Shelters shareholders from -exempt from filing annual
liability account with a public authority
-Limits losses -risky
Corporation -Owner protection from legal
liabilities
-Ability to attract investors
-Stock and stock options for
employees (appeal to potential
employees)
-Times and cost of incorporation
-Potential tax liability
-Following corporate
“formalities”

If I had to choose one of the business options above, I would most likely choose Partnership.
The reason I chose partnership was because I am a person who gets greedy with money. Although I
would like ALL the money, I should probably be safe and go with partnership so if I end up losing the
game of money, I would have other people to back up on. The opportunity cost is basically the other
companies I did not choose, whether the others could have enhanced the money in my bank or not. My
“product” will most likely be a law firm which would be marketed where other law firms are marketed,
the internet after I get a noticeable and trustworthy reputation of my firm.