P ROPRIETORSHIP A proprietorship is owned by one individual.  70% of business entities in the U.S. are proprietorships.  They are easy and cheap to organize.

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P ROPRIETORSHIP A proprietorship is owned by one individual.  70% of business entities in the U.S. are proprietorships.  They are easy and cheap to organize.  Resources are limited to those of the owner.  Used by small businesses.

P ARTNERSHIP A partnership is similar to a proprietorship except that it is owned by two or more individuals.  10% of business organizations in the U.S. (combined with limited liability companies) are partnerships.  Combines the skills and resources of more than one person.

C ORPORATION A corporation is organized under state or federal statutes as a separate legal taxable entity.  Generates 90% of business revenues.  20% of the business organizations in the U.S.  Ownership is divided into shares, called stock.  Can obtain large amounts of resources by issuing stock.  Used by large businesses.

L IMITED L IABILITY C OMPANY (LLC) A limited liability company (LLC) combines the attributes of a partnership and a corporation.  10% of business organizations in the U.S. (combined with partnerships).  Often used as an alternative to a partnership.  Has tax and legal liability advantages for owners.

Cost Concept o Under the cost concept, amounts are initially recorded in the accounting records at their cost or purchase price.

Business Entity Concept o Under the business entity concept, the activities of a business are recorded separately from the activities of its owners, creditors, or other businesses.