Business Types

There are five main types of businesses in America. These five types of businesses are Sole Proprietorship, Limited Liability Company, Cooperative, Corporation, and Partnership. Each type of business effects the government and economy in several different ways; either working to better the economy and government or working against it. The way each business works is quite similar, they all work together to accomplish the same goal; to make a successful, plentiful business worth a lot of money. The first type of business to describe is Sole Proprietorship. This is the easiest type of business to set up and the most common. It is a business owned and run by one individual outside of a corporation with no difference between the business and the owner. The business owner is entitled to all of the business’s profits and is responsible for all debts, losses and liabilities. When forming Sole Proprietorship, no formal action is taken only if you are the only owner; this distinction automatically comes from the business action. In fact, one may already be owned without even knowing it. If someone is labeled as a freelance writer, for example, he or she is then, a sole proprietor. But, it’s not all that easy. A sole proprietor must also sort through and figure out all of the permits and licenses required to run their business legally and efficiently. Regulations usually vary by industry, state and locality. If it is chosen to operate under a name different than that of the owner’s, they will most likely have to file a fictitious name (this could also be known as an assumed name, trade name, or DBA name, which stands for "doing business as"). The name must be original; it cannot be one that is already claimed by another business. Another topic to discuss about sole proprietorship is taxes. Because the business owner and the actual business are one in the same, the sole proprietorship is not taxed separately since the business’s profits are your profits as well. They