OWNERSHIP TYPES & COOPERATIVES.

Forms of Business Ownership &

cooperatives.

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Types of Business ownership.

The main types of business organizations are:
Sole Proprietorship
Partner
Co-operative
Franchise

Sole
Proprietorships
cooperatives

Partnerships
franchise

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Revenue collected from diff. Business ownership.

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sole
proprietorship

a business owned by one person

partnership

a business owned by two or more people

who share its risks and rewards

corporation

a company that is registered by a state and

operates apart from its owners
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nonprofit
organization

a type of business that focuses on providing

service, not on making a profit

franchise

a contractual agreement to use the name

and sell the products or services of a
company in a designated geographic area

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Sole Proprietorship Advantages & Disadvantages

Advantages for Owner

Disadvantages for Owner

Easy to start

Limited access
to credit

Proprietors keep
all the profits

The owner may not have

the necessary skills

Proprietors are
in charge

Many run out

of money

Taxes are lower

than a corporations

The business ends

when the owner dies

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Partnership Advantages & Disadvantages

Advantages for Partners

Disadvantages for Partners

Easy to start

Business risk is shared

Not dependent on a
sole person
Unlimited legal and
financial liability is
shared

Easier to
obtain capital
Only taxed once

If one partner makes a

mistake, all partners are
responsible

Diversity in skills
Easier to
obtain credit

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Corporation & co-orporative

To form a corporation, the owners
must get a corporate charter from
the state where their main office will
be located.
corporation
a company that is registered by a
state and operates apart from its
owners

The purpose of a cooperative is to

save money on the purchase of
certain goods and services.
cooperative
an organization that is owned
and operated by its members

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Corporation Advantages & Disadvantages

Advantages of Corporations

Disadvantages of Corporations

Capital easy to obtain

Limited liability for shareholders
Can invest without having to
manage day-to-day operations
Possibility of unlimited lifetime of
business
Decision-making is shared

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Double taxation: profits and earnings

Subject to more laws than other types
of ownership
More difficult to form
Operations controlled by
shareholders and board of directors
instead of original owner(s)
.

A nonprofit organization does not

pay taxes because it does not make a
profit.
nonprofit organization
a type of business that focuses on
providing a service, not making a
profit

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To run a franchise, you have to

invest money and pay franchise fees
or a share of the profits.
franchise
a contractual agreement to use
the name and sell the products or
services of a company in a
designated geographic area

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