Identification should include the definition, legal requirements, and examples of the major types of business ownership, such as the following:

Sole proprietorship—owned by one person
Partnership (general and limited)—owned by a small group of people, usually two or three
Corporation—owned by a number of people, operated under written permission from the state, with a separate legal personality from its owners

Limited liability company (LLC)—a hybrid form of business that has characteristics of both a corporation and a partnership
Limited liability partnership (LLP)—allows partners to enjoy limited personal liability, while general partners have unlimited liability
S-corporation—meets specific Internal Revenue Code requirements that give a corporation with 100 or fewer employees the benefit of incorporation while being taxed as a partnership

Franchise—allows the franchisee to start a business by legally using someone else’s (i.e., the franchisor’s) expertise, ideas, and processes
Nonprofit corporation—formed to carry out a charitable, educational, religious, literary, or scientific purpose; does not pay federal or state income taxes from activities in which it engages to carry out its objectives
Cooperative—an association of persons united voluntarily to meet common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise

Process/Skill Questions:

What are the advantages and disadvantages of a sole proprietorship? Of a partnership? Of a corporation?
Which of these business types presents the most risk, and why?
Why should a partnership agreement be drawn up as a legal document?
How does one become part owner of a corporation?
What are the major benefits of a franchise?
Which type of business is the most common form of ownership in the United States?
Which form of business ownership would be the best type for a startup venture, and why?