Forms of

Business Organizations
All by yourself?
Sole Proprietorship
Owned by one person
Owner keeps all the profits

Relatively unlimited control

Easyto form
No separation of owner from business
Owner responsible for all debts/liabilities
Businessand personal property can be seized
How can I start one?
How can I start one?
Few legal requirements

Can be run from a home,

garage, or van
Do you have a friend…
Do you have a friend…
and a good idea?
Partnerships
Owned by two or more people
Share profits equally
(unless otherwise agreed upon)
Partnerships
Owners share all the risks equally
Fully liable withoutlimit
(similar to a soleproprietorship)
 Forming a
Partnership
PartnershipAgreement
More difficult thana
soleproprietorship
Corporations
Corporations
Legal entity/artificial person
Separate from itsowners
Corporations
Owners risk losing their investments
Owners do not lose personal assets
Harder to form
Corporations
State Charter and Organizational Fees
 Let’s
Review
 Sole Proprietorship
Requirements for Organization None

LegalStatus Owner is the business

Liability Unlimited Liability

Management Owner decides

Dissolution Owner decides/death

Easeof formation Just do it

Duration Death or disinterest

 Partnership
Requirements for Organization Agreement of Parties

LegalStatus Owners not aseparate

entity
Liability Unlimited Liability

Management Owner have equal say

Dissolution Owners decides/death/

withdrawal/Bankruptcy
Easeof formation Moderately Hard

Duration Withdrawal/Bankruptcy
 Corporations
Requirements for Organization State Charter/Org. Fees

LegalStatus Separate entity from

Owners
Liability Limited liability of
Shareholders
Management Directors set policy and
Appoint officers
Dissolution Does necessarily end

Easeof formation Difficult

Duration Can be perpetual

Any Questions?