Characteristics of Business Organizations
Sole Proprietorship O Business owned and run by one person O Largest number of businesses in the US
Partnership O Business owned by 2 or more people O Fewest number in the US
Corporation O A form of a business organization recognized by the law as having all the rights of individuals O Generates the most business
Profits and losses: shared or not?
Sole Proprietorship O Not shared
Partnership O Shared between partners according to partnership agreement
Corporation O Shared with stockholders O Dividends
Liability: Limited or Unlimited. Discuss
Sole Proprietorship O Unlimited
Partnership O Unlimited or limited depending on how the Articles of Partnership are written
Corporation O Limited
Management: Is it easy or difficult?
Sole Proprietorship O Easy O You can make decisions quickly
Partnership O Can be difficult as each owner may have their own ideas
Corporation O Can hire management teams to run most efficiently
Taxes: What type are paid?
Sole Proprietorship O Individual Income Tax
Partnership O Individual Income Tax
Corporation O Double Taxation – O Individual Income Tax for shareholders O Corporate Tax for the business
Personal Satisfaction: What kind of satisfaction do owners get?
Sole Proprietorship O Lots O They reap all the benefits
Partnership O Lots O They can reap many benefits
Corporation O Stock Dividends – yes O No satisfaction from running your own business or being your own boss
Start-up: Is it easy or difficult? How do you do it?
Sole Proprietorship O Easy O Apply for a business license
Partnership O Easy O Need Articles of Parnertership drawn up listing who is responsible for what
Corporation O Hard O Must file for permission from the gov’t O If approved a charter will be granted O Then you can sell stock
Financing Growth: Is it easy to raise money for growth?
Sole Proprietorship O Very difficult O Banks less likely to lend to an individual
Partnership O Difficult depending on the size of the partnership
Corporation O Very easy O Sell more stock
Efficiency: Can the business operate efficiently?
Sole Proprietorship O Depends on the size of the business O Can be difficult if you are the one in charge of all aspects of the business
Partnership O Can be difficult depending on the size O More efficient than a sole proprietorship
Corporation O Very easy O Can hire a professional team to manage it
Attracting New Employees: Easy or Difficult?
Sole Proprietorship O Difficult O You cannot offer the same benefits and pay
Partnership O Difficult depending on the size
Corporation O Easy O Can offer many incentives
Life of the Business: How long does it continue?
Sole Proprietorship O Limited O Owner dies – business dies
Partnership O Limited and Unlimited O Depends on how the Articles of Partnership are written
Corporation O Unlimited O Stock can be sold to others when someone does not want it any longer