CHAPTER 31: FORMS OF BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP PARTNERSHIP CORPORATION LIMITED LIABILITY CORPORATION (CH 33)

(SOLE) PROPRIETORSHIP ADVANTAGES DECISION MAKER KEEP ALL PROFITS -TAXED AS PERSONAL INCOME NO STATE CHARTER REQUIRED LIMITED RECORDKEEPING REQUIREMENTS DISADVANTAGES UNLIMITED PERSONAL LIABILITY (INSURE YOURSELF) LACK OF MANAGEMENT HELP

PARTNERSHIP (2 +) ADVANTAGES DISADVANTAGES SHARE PROFITS (%?) – TAXED AS PERSONAL INCOME “SYNERGY” (1 + 1 > 2) COMBINED CAPITAL, LABOR, SKILL, AND KNOWLEDGE DISADVANTAGES EACH GENERAL PARTNER IS FULLY LIABLE CHOOSE CAREFULLY! ENDS IF ANY PARTY IS REMOVED

CORPORATION ADVANTAGES DISADVANTAGES LIMITED LIABILITY TRANSFER OF OWNERSHIP  PERPETUAL LIFE FINANCIAL STRENGTH  ATTRACTIVE TO INVESTORS AND DESIRABLE EMPLOYEES COMBINED EXPERTISE DISADVANTAGES INITIAL COST TO INCORPORATE PROFITS, DIVIDENDS, AND INCOME ARE TAXED BY FEDERAL AND STATE (S CORP = PARTNERSHIP RE: TAXATION) SECURITIES REGULATIONS JURIES’ PERCEPTION

LIMITED LIABILITY CORPORATION (LLC) ADVANTAGES LIMITED LIABILITY TAXED AS PARTNERSHIP UNLIMITED # OF “MEMBERS/OWNERS” (75+) UNLIMITED CLASSES OF MEMBERS PARTICIPATION IN MANAGEMENT DISADVANTAGES FORMATION ISSUES DIFFICULTY IN TRANSFERRING ASSETS FROM A PARTNERSHIP OR CORPORATION TO THE LLC