Forms of Business
This business form is the simplest and most basic way of carrying on a business
Sole proprietorship
This role involves being responsible for the day-to-day operations of a corporation and reporting to the board of directors
Officer
The greatest advantage of a sole proprietorship is that the owner retains this over the business
In this business form, the owner fully owns and operates the business and assumes all legal and tax liabilities
Sole proprietorship
A franchise agreement involves these two roles, where one operates the business and the other provides the name, methods, and products
The franchisee and franchisor
The primary disadvantage of general partnerships and sole proprietorships is this type of liability
Unlimited liability
This type of partnership includes at least one general partner and one partner whose liability is limited to their investment
Limited partnership
In a general partnership, this type of liability means partners are responsible for debts both jointly and individually
Joint and several liability
Corporations offer this major advantage, allowing shareholders to avoid personal liability for the corporation's debts
In this type of business organization, shareholders are the owners but are distinct from the entity itself, which has its own legal identity
Corporation
This relationship allows a principal to delegate responsibility to an agent, who binds the principal in dealings with third parties
Agency relationship
One disadvantage of corporations is that ownership and this aspect of the business are often separate
Management
This business form is composed of professionals such as lawyers or accountants, where partners are only liable for their own professional negligence
Limited liability partnership (LLP)
A business that operates temporarily to complete a specific project is known as this type of relationship
Joint venture
This disadvantage arises in partnerships when there is no written agreement, causing statutory presumptions to govern the relationship
Lack of clarity in roles and responsibilities