| A | B |
|---|
| Sole proprietorship | A business owned and operated by one person. A sole proprietorship is the easiest and most popular form of business ownership. Approximately 76 percent of all businesses in the United States are sole proprietorships. |
| Partnership | A form of business ownership in which two or more people share the assets, liabilities, and profits. |
| General partnership | A partnership in which all partners have unlimited personal liability and take full responsibility for the management of the business. |
| Limited partnership | A partnership in which the partners’ liability is limited to their investment. |
| Joint venture | A partnership in which two companies join to complete a specific project. The partnership ends after a specified period of time. |
| Strategic alliance | A partnership in which two businesses work together for mutual benefit. (Example: A business forms a partnership with a manufacturer that agrees to produce the business’s products.) |
| Corporation | A business that is chartered by a state and legally operates apart from its owners. |
| C-corporation | The most common form of corporation. It protects the entrepreneur from being personally sued for the actions and debts of the corporation. |
| Subchapter S corporation | A corporation that is taxed like a sole proprietorship or partnership. |
| Nonprofit corporation | Legal entities that make money for reasons other than the owner’s profit. (Examples: churches, charities, education foundations, trade associations) |
| Limited Liability Company (LLC) | A new form of business ownership that provides tax advantages and limited liability. (Examples: law and medical firms) |
| Franchise | A legal agreement that gives an individual the right to market a company’s products or services in a particular area. |
| Franchisee | A person who purchases a franchise agreement. |
| Franchisor | The person or company who sells a franchise. |
| Initial franchise fee | The fee the franchise owner pays in return for the right to run the business |
