Title: Compare major types of business ownership.
Course: Principles of Business and Marketing (12051-18) > Section: Exploring the Core Concepts of Business and Marketing

Comparison should include definitions, advantages, disadvantages, and examples of

- sole proprietorship—owned by one person
- partnership—owned by a small group of people, usually two or three
  - general partnership
  - limited partnership
- corporation—owned by a number of people and operated under written permission from the state, with a separate legal personality from its owners
- limited liability company (LLC)—hybrid form of business that has characteristics of both a corporation and a partnership
- limited liability partnership (LLP)—allows partners to enjoy limited personal liability, while general partners have unlimited liability
- S-corporation—meets specific Internal Revenue Service (IRS) code requirements that give a corporation with 100 or fewer employees the benefit of incorporation while being taxed as a partnership
- franchise—business opportunity that allows the franchisee to start a business by legally using someone else’s (the franchisor’s) expertise, ideas, and processes
- nonprofit organization—formed to carry out a charitable, educational, religious, literary, or scientific purpose; does not pay federal or state income taxes on profits from activities in which it engages to carry out its objectives
- cooperative—an association of persons united voluntarily to meet common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprise.

Process/Skill Questions:

- What are the advantages of each type of business ownership?
- What are the disadvantages of each type of business ownership?
- What examples from the local community represent each type of ownership?
- What is limited liability? What is unlimited liability?
- What are the basic similarities between a sole proprietorship and a franchise business? What are the advantages of each?
- What is the difference between an LLC and an LLP?