Intro: What are the common forms of business ownership structure in the United States and what are some advantages and disadvantages of each?

 

Because this topic is only an introduction to the common forms of business it does not include Steps #2 or #3 because those steps are for quizzes and this introduction does not have a quiz.  However, I strongly recommend that you do NOT skip watching this introductory video because it includes a summary table of the advantages and disadvantages of the common forms of business that you definitely will not want to miss.  So, please just study this introduction and then move on to the subsequent topics and related quizzes included in this module (Module 2).

Study the (2m:17s) video for this topic provided below:    Introduction To Forms Of Business Ownership - Video Slides 1-5 (2m:17s) Links to an external site.

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The videos, images and transcripts below provide the same content as provided in Step #1 above.  It has simply been broken down into smaller, bite-sized pieces for easier access and review.

Slide 1 (:13s) Links to an external site. Welcome to Introduction to Accounting for a User’s Perspective
What are the common forms of business ownership structure in the United States and what are some advantages and disadvantages of each?

Slide 2 (:52s) Links to an external site. This topic serves to simply introduce the major types of business ownership structure in the United States, subsequent topics will dig into each structure in more detail to understand each of their advantages and disadvantages so that when you choose to start a business you can think through the ramifications of choosing one structure over the other and, in consideration of your goals and the help of your advisors, make the best structure choice for your venture(s).

The four general, for-profit, business structures that we will introduce now, and discuss in further detail in the next four topics and related quizzes are as follows:

1)      Sole proprietorship
2)      Partnership
3)      Corporation
4)      Limited Liability Partnership (LLP) and Limited Liability Company (LLC)

Slide 3 (:26s) Links to an external site.  Based on the Industry Sales by Firm Structure table provided below, we can see that sole proprietorships make up over 60% of all for-profit businesses in the United States; however, corporations which only account for less than 35% of all businesses, generate over 90% of all the related revenues.   Source:  http://bizstats.com/reports/sales-structure.php Links to an external site.

Slides 4 & 5 (1m:03s) Links to an external site.  The following Summary of Business Ownership Structures table is the focus of this and the next four topics.  To be honest, if you can really study, and understand this table, specifically noting the advantages and disadvantages of the different ownership structures and think through how knowing them might be beneficial to you in the real world, you are probably already ready to take the 4 related quizzes that follow, one for each ownership structure.  You should use this table as a study guide as you read the remaining topics.

Summary of Business Ownership Structures

Because this topic is simply an introduction to the various business ownership structures, I will not yet quiz you on the material.  At this point, just move on to the next topic at the bottom right of this page in Canvas titled "What are sole proprietorships and what are some of its advantages and disadvantages?".  After studying the next topic, you will have the opportunity to take a quiz on it.  Good luck.