Types of business 

Introduction 

 Types of business categories of

 organizations relative to their size, purpose or

 ownership. Each and every organization has its

 purpose, benefit, and reasons for risks that

 determine its operational or management focus.

 Understandably, under this essay, we are only

 focusing on the main business organization.

 Herein we are just going to give you a little

 overview of the main business organizations as

 shown below:

 1. **Sole Proprietorship**: This is

 a type of organizational business ownership. It is

 sort of the most basic and most common of the

 organization type of business ownership. In this

 mode of business ownership, it is famously

 known as a very personal form of ownership

 and management bearing in mind that the

 business is just like no legal bond, and not a

 legal entity, so Types of business  is no form of separation

 between the owner and ownership of the

 business. In this type of organization, the owner

 bears the full burden, any liabilities, and

 responsibility; only that the sole owner also

 enjoys all profits or income coming out of the

 business. **Pros: * Very simple to set up and get going, also, very minimal of regulatory, legal

 updates or even regulation for that matter *

 Owner picks when, what, why, and where of

 each management decision * Great form of

 starting with a limited amount of financial

 capital **Cons: * The owner bears all rights to

 full unlimited liability and singularly manages

 all business decisions, income, debts, and losses;

 but also, unlimited responsibility * Business

 financing is difficult to get. * It’s actually not a

 long-term thing, and can be taken down and

 closed at any time by the owner themselves** 

 2. **Partnership**: This is more or less like a

 sole proprietor except instead of an individual

 owning the business, the partnership is made up

 of a group of persons. There are different forms

 of partnerships such as general partnership or

 limited partnership. All partnerships share a

 mix of personal liabilities, but are distributed in

 a different manner, and with differing levels of

 LP involvement. * **General Partnership** is

 where each person in the partnership shares full

 liability and full management. * **Limited

 Partnership(LP):** Here one of the

 individuals/corporations is a general partner,

 who contributes capital or work activities and

 that person lives the day to day process, then the

 limited partner, is one who solely contributes

 capital, to the operations of the partnership.  

## 3. **Corporation (C Corp)**

A **corporation** is a more complex

 organizational structure. The corporation is a

 separate legal entity, as established by filing

 Articles of Incorporation with the appropriate

 state office.

 A corporation can own property, it

 can enter contracts and sue or be sued, again in

 its own legal capacity (as opposed to the capacity

 of the shareholders, board members, or

 employees) . A corporation limits the liability of

 its owners (shareholders) regarding expenses

 and debts incurred on business operations. If a

 corporation does not pay its expenses, debts, or

 obligations, the shareholders are not personally

 responsible for expenses or debts incurred

 during the business operations.

- **Advantages:**

  - Provides limited liability to owners

 (shareholders).
  - Allows owner to raise capital, somewhat

 inexpensively, through selling shares of stock.

  - May have potential for continued existence

 beyond the owner's lifetime.

- **Disadvantages:**

  - Corporation is subject to double taxing (once

 on the corporation income, again when

 shareholders receive dividends).

  - Subject to more regulations and requirements

 than a proprietorship or partnership.

  - More time-consuming and expensive to

 administer than a proprietorship or partnership.

---

### 4. **Limited Liability Company (LLC)**

A **Limited Liability Company (LLC)** is a

 hybrid structure between a corporation and a

 partnership. Owners (called members) of an LLC

 enjoy limited liability protection and enjoy other

 advantages, like corporations, out they can

 select to be taxed as a sole proprietorship or a

 very flexible partnership rather than a

 corporation in some instances.   LLCs provide

 owners more flexibility in terms of ownership

 and management. 

- **Advantages:**

  - Provides limited liability to owners (members).

  - Option for tax treatment provides more

 flexible planning; potentially avoiding upfront

 double taxation.

  - Fewer formalities to maintain than a

 corporation.  

## 5. **S Corporation (S Corp)**

An S Corporation is a corporation that for tax

 purposes is treated as passing income,

 deductions, or losses to shareholders to be taxed

 on their personal income tax returns as a

 partner or member of a partnership for tax purposes.

- **Benefits**:

- No double taxation on business income.

- Limited liability for all shareholders.
- Easier transfer of ownership compared to an LLC.

- **Limitations**:

- Eligibility requirements or restrictions (e.g. max

 number of shareholders).

- More formalities and regulations than LLC.

- Limited distribution or sharing of profits or

 losses compared to partnership.

---

### 6. **Cooperative (Co-op)**

A cooperative is a business entity that a business

 owned and controlled by those using its services

 in which the profits and earnings from the

 cooperative goes back, or is distributed among

 its members? 

 Cooperation exist in many

 industries which include at its most basic level,

 agriculture, utility, and retail.

- **Benefits**:

- Owned and controlled by its members 

who receive the profits.

- Decisions are made through a democratic

 process, (i.e member voting).

- Member liability is limited.

- **Limitations**:

- Hard to build up capital.

- Slow decision making process form democratic

 process.

- Limited possible profits compared to other

 entity structure.

### 7. **Nonprofit organization**

A nonprofit is defined as a business entity

 organized and operated for a purpose other than

 making a profit. Nonprofits are not taxed as

 business entities, or are not required to pay

 taxes. If a nonprofit has revenues exceeding its

 expenses, the cut adheres to the its

 organization’s purpose, mission, or some

 measure of a public good.

- **Benefits**:

- Tax exemption status.

- Ability to apply for public and private grant

 opportunities.

- Attracts donations and volunteers.

- **Limitations**:

- Regulatory and reporting issues.

- Cannot distribute profits to its members.

- Raise capital is consisten or unconsistent funding.

### Conclusion

Ultimately, the type of business entity will be

 based upon numerous factors such as, control,

 limited liability, taxes, and raising funds.