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

2. (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

3. 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

4. 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

5. 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