Other Types of Business Owners
While C-corporations are the most common type of corporate ownership, there are other forms that you should be aware of. Read this section to learn about S-corporation, Limited Liability Companies, cooperatives, and non-profit organizations. Completing the exercise at the end of the section will give you a table to use as you prepare for the final exam.
Hybrids: S-Corporations and Limited-Liability Companies
The Hybrids
How would you like a legal form of organization that provides the attractive features of the three common forms of organization (corporation, sole proprietorship and partnership) and avoids the unattractive features of these three organization forms? It sounds very appealing. This is what was accomplished with the creation of two hybrid forms of organization: S-corporation and limited-liability company. These hybrid organization forms provide business owners with limited liability (the attractive feature of corporations) and no "double taxation" (the attractive feature of sole proprietorships and partnerships). They avoid double taxation (the unattractive feature of corporations) and unlimited liability (the unattractive feature of sole proprietorships and partnerships). We'll now look at these two hybrids in more detail.