Forms of Business Ownership
Jazzi-Blue Baker
Corporations
C-Corporations
Corporations
S-Corporation
Limited Liability Company
- corporation set up through IRS tax election
ADVANTAGES
- shareholders are not effected when they leave the corporation
- shareholder expenses can be business expenses
DISADVANTAGES
- operations are a strict process
- equal pay causes high employment tax
- business owned by shareholders
ADVANTAGES
- can gain capital
- little liability
- taxation separate from owners
DISADVANTAGES
- costly and time consuming
- additional paperwork to start business
- sometimes corporation are taxed twice
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- company that has limited liability of corporation and tax efficiency of partnership
ADVANTAGES
- less paperwork and restriction
- limited liability of owners
- distributed profits as seen fit
DISADVANTAGES
- business is effected after member leaves
- self-employment tax
- when two or more people share a single business
ADVANTAGES
- finances are shared
- multiple strengths
- easy and inexpensive form
DISADVANTAGES
- possible disagreement
- sharing of profits
- full liability amongst partners
- simple business form; one operator of business
ADVANTAGES
- can be obtained easily and inexspensively
- properties and funds from personal life and business
- income is for the owners
DISADVANTAGES
- liability is on the owner
- more risk of lawsuits
- do not last if owner is no longer alive
- one business owner that builds a business from other entrepreneurs
ADVANTAGES
- easy access to good mangement
- good way to obtain expansion captial
- less of a risk when expanding
DISADVANTAGES
- less control over managers
- difficult to begin a franchise
- restriction on ideas for franchise