Kami Export - annotated-BusinessOwnershipTypesGraphicOrganizerAssignmentIntrotoBusiness-1%20%281%29

Types of Business Ownership Chart Name: __Janiuska Rivas____________________________ Instructions: Use your knowledge, google and/or the SBA website and other online resources to complete this chart. What is a sole proprietorship? A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation. Advantages of sole proprietorship: Less paperwork to get started. Easier processes and fewer requirements for business taxes. Fewer registration fees. More straightforward banking. Disadvantages of sole proprietorship: you have unlimited liability for debts as there's no legal distinction between private and business assets. your capacity to raise capital is limited. all the responsibility for making day-to-day business decisions is yours. Sole proprietorship examples: Freelance Writer. A freelance writer provides written content for clients, either for print or digital publication. Photographer. Personal Trainer. Plumber. What is a partnership? partnership is a legal agreement between two or more entities that determines shared ownership and operation of a business. Advantages of partnership: The potential for more cash. Greater borrowing capacity. A reduction in costs. More business opportunities. Disadvantages of partnership: Slower and harder decision- making Perception of low prestige Possibility of disagreement and conflict Profits have to be distributed. Sharon Bogere© 2020

Partnership examples: GoPro & Red Bull. Pottery Barn & Sherwin-Williams, Casper & West Elm. Types of Business Ownership Chart What is a limited liability partnership? Limited liability partnership (LLP) is a type of general partnership where every partner has a limited personal liability for the debts of the partnership. Advantages of limited liability partnership: Division of responsibilities. Ease of formation. Limited personal liability. Greater flexibility of action. Disadvantages of limited liability partnership: Don't exist in every state. LLPs usually only allow certain professions. No ability to file taxes as an S corporation.

What is a corporation? A corporation, sometimes called a C crop, is a legal entity that's separate from its owners. Corporations can make a profit, be taxed, and can be held legally liable. Corporations offer the strongest protection to its owners from personal liability, but the cost to form a corporation is higher than other structures. Advantages of corporation: Double- taxation. Corporations pay taxes on profits distributed to shareholders. More complicated to form. More requirements Higher costs. Disadvantages of corporation: Distinct Legal Entity. Double Taxation. Expensive to Form. Complicated to Form. Sharon Bogere© 2020 ∙ Corporation examples: Amazon. J.P. Morgan Chase. Microsoft. Google.

What is a S corporation? S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Advantages of S corporation: High level of asset protection. Perpetual existence. Flexible accounting methods. Ease of ownership transfer. Disadvantages of S corporation: Tax qualification obligations. Calendar year. Stock ownership restrictions. Closer IRS scrutiny. S Corporation examples: XYZ Inc. What is a B corporation? A Certified B Corp is a for profit corporation that has been certified by B Lab, which is a non-profit company that measures a company's social and Advantages of B corporation: Build trust with their consumers, communities, and suppliers. Are able to attract and retain employees. Disadvantages of B corporation: A B corporation is taxed as a business which isn't necessarily beneficial to a B Corp. Sharon Bogere© 2020

A franchise enables you, the investor or franchisee, to operate a business. You pay a franchise fee and you get a format or system developed by the company (franchisor), the right to use the franchisor's name for a specific number of years and assistance. Little to no industry experience is necessary. Existing customer base and brand awareness. Lower risk than starting an entirely new business. Limited creative opportunities. Financial information is shared with the franchisor. Varied levels of support. Initial investments and start up costs can be expensive. Franchise examples: McDonald's, 7-Eleven, Taco Bell Sharon Bogere© 2020