Proprietorships, Partnerships, and Corporations
Different Types of Companies
Proprietorships: Proprietorships are businesses owned by one person. Usually, these businesses are smaller, more independent ones. Such example would be our very own Johnny's Hometown Diner. The proprietor, our well known John Cullen, established this restaurant solely on his dream. Proprietors are responsible for their debts, payments, and other responsibilities of the business.
Partnerships: Partnerships are businesses owned by two to three people. These businesses are slightly larger, and these people carry the same responsibilities as proprietors do. Though because the work can be split between two or three people, it can be slightly easier to manage. Google is a good example because in 1998, Larry Page and Sergey Brin started the partnership that created our favourite search engine. Even though it started as a partnership, Google is now a large corporation.
Corporations: Corporations are businesses held by stockholders. In a corporations, there is not a single owner. To make decisions, the Board of Directors is called upon to deal with responsibilities. Stockholders do not have any part in the decision making, however they buy sections - or stocks - used solely to raise money for the company. Once a person buys a few shares and the company is doing well, that person can then sell the stocks they bought at a higher price than the original to make profit. If the company does bad, stockholders do not pay for any of the losses. They only pay the price of the stocks and nothing more. McDonald's is a corporation because it has expanded beyond the reach of only one person's management. Now, citizens are able to by shares of McDonald's and sell their stocks for higher prices, since the food chain is doing well.
In 1863, John D. Rockefeller created a company as he entered the oil business. He started as a proprietor and gradually worked his way up to a corporation. This corporation today is now entitled Standard Oil. Without oil companies like Rockefeller's, cars wouldn't start and there would be no fuel to transport people and trading goods.
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