Final answer:
The four types of business structures are Sole Proprietorship, Partnership, Corporation, and Limited Liability Company (LLC), each differing in liability, funding, and taxation. Joe and Jack's business aligns with an LLC, Howard's description suggests a Corporation, Katie's situation indicates a Sole Proprietorship, and Cooper and Eric are in a Partnership.
Step-by-step explanation:
When selecting a form of business structure, one must consider several factors including liability, funding options, tax implications, and control over the organization.
Different Types of Business Structures:
- Sole Proprietorship: A business owned by one person who has full liability; it's the simplest form but offers no personal liability protection.
- Partnership: Owned by two or more individuals who share profits, losses, and management responsibilities, with each partner having personal liability.
- Corporation: A more complex structure, with shareholders owning the company, and it's considered a separate legal entity, offering limited liability protection.
- Limited Liability Company (LLC): Combines the characteristics of both partnerships and corporations with benefits like pass-through taxation and limited liability.
Now, let's address the student's question:
- Joe and Jack's business, with traits of both a corporation and a partnership, indicates a Limited Liability Company (LLC).
- Howard's use of debt securities and stock suggests a Corporation, given these are common methods of funding for corporations.
- Katie as the sole owner with full liability for losses is operating a Sole Proprietorship.
- Cooper and Eric's joint operation with personal liability is a classic example of a Partnership.