4 Types of Companies

Sole Proprietorship:

• owned & run by one person;
• most common in world
• No separation between business & owner

Partnerships

• Same as SP but more than 1 owner
• All owners liable
• Limited Partnership: general partner and limited partners

Limited Liability Company

• Limited partnership without general partners — relatively new
• All owners have limited liability

Corporations

• Legally defined, artificial being, separate from owners
• Ownership through; stock,
• Double taxation = Corp pay tax on profits, shareholders pay tax on distribution of earnings
• S Corp = chapter S treatment, firm’s profit not gov’t taxable, shareholder pays taxes (STRICT GOV’T REGULATION ON WHO CAN DO THIS)
• C Corp = subject to corporate taxes, most companies are C corp