From the course: Finance Foundations: Income Taxes

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Ownership structure: Sole, partnership, and corporation

Ownership structure: Sole, partnership, and corporation

From the course: Finance Foundations: Income Taxes

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Ownership structure: Sole, partnership, and corporation

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- To introduce the topic of corporate taxation, we need to talk about business structure in general. There are three general ways to structure business. One is as a single person. This is called a sole proprietorship. That's just one person doing business. Next, a group of connected people doing business business is called a partnership. is called a partnership. And finally, a group of loosely connected Finally, a group of loosely connected people doing business people doing businessis called a corporation. is called a corporation. Sole proprietorship is easy to form. You just start doing business. Maybe you need a business license, but there's no real process that needs to be gone through. It's also easy to terminate a sole proprietorship. You just stop doing business, or you sell the business to somebody else. Now, the downside of the sole proprietorship structure proprietorship structureis unlimited liability. is unlimited liability. Legally, the acts of a person doing business and…

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