Organizational complexity is an unavoidable aspect Global Perspectives on Achieving Success in Competing in both high and low-cost operating envi Servant Leadership: Research and Practice. Leaders represent a necessary part of any organiza Integrated Operations in the Oil and Gas Ind Planning and Implementing Resource Discovery Today, new skills are required to compete in a glo Implementing Information Technology Governan In many organizations, information technology IT Electronic Enterprise: Strategy and Architec The amount of money contributed, control exerted over the business, and legal liability vary depending on which type of partnership is formed.
To form a partnership, most states require partners to register the business with the secretary of state.
It is also important for the partners to formalize their relationship in a partnership agreement, which is a contract that addresses the major aspects of the business, including how it will be run, how profits are split, and what to do in the case of dissolution. There are generally two types of corporations: C corporations and S corporations. Larger businesses with multiple employees are often structured as C corporations, whereas many smaller businesses choose to organize as S corporations.
The primary difference between an S and C corporation is how taxes are paid. C corporations are taxed as independent entities. An LLC may choose to treat itself as an S corporation for tax purposes. The basic definition of a nonprofit organization is a business that does not pass on excess revenue to owners, shareholders, or other investors.
Instead, a nonprofit uses this money to further its mission, which includes paying the salary of its owners and other employees. Many nonprofit organizations choose to incorporate to obtain federal and state tax exemptions, grants, and other benefits. One of the most common types of nonprofit organizations is a c 3 , named after a section of the IRS code, but there are other types. Franchises are not a traditional business structure like the ones described above.
A franchise is a business that licenses the name, logo, trade secrets, or other aspects of an existing business. For example, most fast food restaurants are franchises. In many cases, a person starting a franchise forms an LLC, partnership, or S corporation, and that company becomes the entity that pays the larger company for the right to use the name.
Discover answers to frequently asked questions about business operations and formation. Last reviewed October Small Business Contents. Sole Proprietorships A sole proprietorship is the simplest kind of business. Ownership structure concerns the internal organization of a business entity and the rights and duties of the individuals holding a legal or equitable interest in that business.
As owner of the business entity, it is important to understand how the ownership structure of a particular business entity is organized and what that means for the owners rights. Visit the following articles for more information on ownership structure:. Why do you think different types of business entity allow for unique ownership structures?
Why do you think ownership structure is so important for business owners?
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