3.06 Classify the Forms of Business Ownership What do you know?

SOLE PROPRIETORSHIP ONE OWNER 70 % OF THE U.S. (WANDA IS THE OWNER OF THE VILLAGE STORE)

SOLE PROPRIETORSHIP ADVANTAGES EASY TO STARTUP. LIMITED GOVERNMENT REGULATIONS INCLUDING TAXES. (TAXED LESS THAN OTHER FORMS OF BUSINESSES) ALL PROFITS GO TO THE OWNER. FREEDOM OF MAKING BUSINESS DECISIONS.

SOLE PROPRIETORSHIP DISADVANTAGES UNLIMITED LIABILITY BUSINESS LOSSES BUSINESS DEBTS SOLELY RESPONSIBLE FOR ALL ASPECTS OF BUSINESS. LIFE OF THE BUSINESS IS LIMITED.

PARTNERSHIP TWO OR MORE OWNERS. < 10% OF U.S. BUSINESSES. General Partnership Share equally in profits or losses. Each partner liable for all debts. Limited Partnership Liable up to amount of investment.. Must have at least one general partner who has unlimited liability. < 10% OF U.S. BUSINESSES. (JOE AND JOHN OWN A MUSIC STORE)

PARTNERSHIP ADVANTAGES RELATIVELY INEXPENSIVE TO START. COMBINE FINANCIAL RESOURCES AND KNOWLEDGE. SHARED MANGEMENT RESPONSIBILITIES. INCREASED POTENTIAL FOR PROFITS. SHARED RESPOSIBILITY FOR RISK. TAXED LESS THAN A CORPORATION. A CHANGE IN OWNERSHIP DOES NOT ALTER CONTINUITY OF THE BUSINESS.

PARTNERSHIP DISADVANTAGES PARTNERS MAY DISAGREE ON DECISIONS. DECISION OR ACTION OF ONE PARTNER IS LEGALLY BINDING ON OTHER PARTNER. IF ONE PARTNER DIES, BUSINESS MUST BE REORGANIZED.

CORPORATION A BUSINESS OWNED BY STOCKHOLDERS. A LEGAL ENITY CHARTERED BY THE STATE . BOARDS, DIRECTORS, AND OFFICERS MANAGE THE DAILY OPERATIONS OF A CORPORATION. (MICROSOFT)

CORPORATION TYPES PRIVATE (CLOSED): DO NOT OFFER SHARES OF STOCK TO THE PUBLIC. PUBLIC (OPEN): SHARES OF STOCK OFFERED TO THE PUBLIC.

CORPORATION ADVANTAGES DELEGATION OF SPECIFIC MANAGEMENT SKILLS. LIMITED LIABILITY TO STOCKHOLDERS. EASIER TO SECURE CAPITAL. STOCHOLDERS CAN EASILTY ENTER OR LEAVE THE BUSINESS.

CORPORATION DISADVANTAGES GOVERNMENT REGULATIONS. COMPLEX TO STARTUP AND DISSOLVE. DOUBLE TAXATION. CORPORATION STOCKHOLDERS COMPLEX RECORD KEEPING

LIMITED LIABILITY COMPANY (LLC) COMBINATION OF PARTNERSHIP AND CORPORATION.

LIMITED LIABILITY COMPANY ADVANTAGES PASS-THROUGH TAXATION EARNINGS TAXED ONLY ONCE. SIMILAR TO PARTNERSHIP. LIMITED LIABILITY (OWNERS ARE NOT INDIVIDUALLY RESPONSIBLE FOR THE DEBTS OF LLC) FLEXIBILITY IN STRUCTURE AND MANAGEMENTOF THE BUSINESS.

LIMITED LIABILITY COMPANY DISADVANTAGES EXPENSE TO STARTUP. EXTENSIVE RECORD KEEPING. IF MEMBER LEAVES, IT CAN DISOLVE THE LLC.