One of the most important decisions an entrepreneur must make when establishing a new business is the form of ownership. This chapter examines the major forms of business ownership and identifies ways investors can become owners of existing businesses.
A sole proprietorship is a business owned by a single owner. The owner is called the sole proprietor. About 70 percent of all firms in the United States are organized as sole proprietorships. However, since most sole proprietorships are small, they generate less than 10 percent of all business revenue.
A partnership is a business that is co-owned by two or more people. The owners of the business are called partners. About 10 percent of all firms are organized as partnerships.
A corporation is a state-chartered business entity that pays taxes and is legally distinct from its owners. The people who form a corporation must adopt a corporate charter and file it with the state government.
Obtaining Ownership of an Existing Business
1. Assuming Ownership of a Family Business
2. Purchasing an Existing Business
3. Franchising
Source:
1. Introduction to Business (2006) by Jeff Madura, (4th ed.). Thomson.
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