1. SOLE PROPRIETORSHIP PARTNERSHIP CORPORATION Types of Business Ownership

2. Making the Decision When a person decides to start their own business they first must decide how the ownership of their business will be legally organized.

3. The Choices Sole Proprietorship – a business owned by one person. Partnership – a business owned by two or more people. Corporation – a business that operates as a legal entity that is separate form its owners and is treated by law as if it were an individual person.

4. Sole Proprietorship One owner Oldest and most common type of ownership 75% of all businesses organized today in the U.S. Most are small businesses Started by entrepreneurs Many are service based

5. Sole Proprietorship - Advantages Easy to Set-Up Simple Licensing Few Government Regulations Total Control Profits to Owner Profits Taxed Once

6. Sole Proprietorship - Disadvantages Limited Capital Unlimited Liability Limited Human Resources Limited Life High Income Taxes

7. Partnership Business owned by two or more people Partnership agreement Partners decide how to divide profits 5% of all business organized in the U.S. today Some become Corporations General Partner/Limited Partner

8. Partnership - Advantages Easy to Set-Up More Skills and Knowledge Available Capital Total Control by Partners Profits Taxed Once

9. Partnership - Disadvantages Unlimited Liability Possible Disagreement Among Partners Shared Profits Limited Life