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Business

Structure
By:
Marc Reyburn
Four Types of Businesses
Cooperatives



Corporations

Single Proprietorships


Partnerships

Single Proprietorships
Definition- is a company owned by one
person who is the sole investor of capital
into the company.
Most common type of business
organization.
Example: Small retail shops, local service
or repair shops; single practitioners such
as doctors, lawyers.


Single Proprietorships
Advantages
Tax Advantages
Owner is in direct control
Minimal working capital requirements
Not subject to a large amount of
government regulation
All profits go to the owner
Single Proprietorships
Disadvantages
It is difficult to raise capital without going
deeply into debt
There is complete or unlimited financial liability
on the part of the owner in respect to the
business
Partnerships
Definition- is a company owned
by two or more individuals who
each invest capital into the
company.
Partnership agreement
Example: Law firms, real estate
agencies, family owned
businesses
Partnership
Advantages
Easy to form
The start up costs are low
There is only limited outside
regulation
Tax advantages
Additional sources of capital are
available
Partnerships
Disadvantages
There is complete or unlimited financial liability
on parts of the owners
Good Partners are hard to find
It is difficult to raise large amounts of capital
with only two owners
Partners may disagree, which results in
confusion among employees and poor
management decisions
Corporations
Definition- is a separate legal entity that is
independent of its owners and run by a
board of directors.
Greatest volume of business
Example: Retain store chains, fast food
chains, manufacturing companies,
multinational companies
Corporation
Advantages
Easier to raise Capital
Legal Entity-Entitled to specific priviledges
Ownership can be transferred to other
individuals
Tax advantages
Limited liability
Specialized management improves
efficiency
Corporation
Disadvantages
Expensive to Organize
Closely regulated
double taxed
Complicated management-less personal
results in worker loyalty and output
Cooperatives
Definition- a company that is
owned and ran by the members.
The members get a percentage
of the profits the company
makes each year.
Examples: Commodity
producers, Farm supply
companies
Cooperative
Advantages
Specialized management
Easier to raise capital
Legal entity-certain rights
Substantial tax advantages
Limited liability
Antitrust and regulatory exemptions
Cooperative
Disadvantages
Incorporating statutes (regulations) quite
restrictive
Cooperation among members is often difficult
to achieve
Slow to organize and difficult to get started
Members fail to recognize their ownership
responsibilities
Other members of the business community
resent coops.
Conclusion
Its about Money
And you have to take
care of business

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