1. Forms of Business Ownership
It’s just paper. All I own is a pickup truck and a little Walmart stock.
………………………………..Sam Walton

2. Sole Proprietorship
A business owned and managed by one individual; the business and the owner are one and the same in the eyes of the law

3. Sole Proprietorship Advantages Simple to create Least costly form
Profit incentive
Total decision-making
No special legal restrictions
Easy to discontinue

4. Sole Proprietorship Disadvantages Unlimited personal liability
Limited skills and abilities
Feelings of isolation
Limited access to capital
Lack of continuity of business

5. Partnership
An association of two or more people who co-own a business for the purpose of making a profit
A partnership agreement or the Uniform Partnership Act

6. Partnership Advantages Easy to establish Complementary skills
Division of profits
Larger pool of capital
Ability to attract limited partners
Little governmental regulation
Flexibility
Taxation

7. Partnership Disadvantages Unlimited liability of at least one
Difficulty in disposing of interest
Lack of continuity
Potential for personality and authority conflicts
Partners bound by law of agency

8. Special Partnerships
Limited partnership-composed of at least one general partner and at least one limited partner
Limited liability partnership-a special type of limited partnership, in which all partners are limited partners
Master limited partnership-a partnership whose shares are traded on stock exchanges, just like corporations

9. Corporations
A separate legal entity apart from its owners which receives the right to exist from the state in which it is incorporated
Domestic
Foreign
Alien
Publicly held
Closely held

10. Corporations Certificate of Incorporation Name Statement of purpose
Time horizon
Names and addresses of incorporators
Place of business
Capital stock authorization’
Capital required at time of incorporation
Provisions for preemptive rights
Restrictions on transfering shares
Names and addresses of officers
By-laws

11. Corporations Advantages Limited liability of stockholders
Ability to attract capital
Ability to continue indefinitely
Transferable ownership

12. Corporations Disadvantages Cost and time in incorporating
Double taxation
Potential for diminished incentives
Legal requirements and red tape
Potential loss of control

13. Limited Liability Company
A relatively new form of ownership that, like an S corporation, is a cross between a partnership and a corporation; it is not subject to many of the restrictions imposed on S corporations; only 2 of the following:
Limited liability
Continuity of life
Free transferability of interest
Centralized management

14. Limited Liability Corporation
Articles of organization-name and address, method of management, duration, names and addresses of each organizer
Operating agreement-no more than 2 of: limited liability, continuity of life, free transferability of interest, centralized management

15. Limited Liability Corporation
Limited personal liability
No limit on number of shareholders
No ban on nonresident alien
No restriction on a member’s ability to manage the company
Avoids double taxation
Flexibility to divide income as owners see fit
Not subject to self-employment tax except for managing member

16. Professional Corporation-lawyers, accountants, doctors, dentists, etc.
Joint Venture-partnership formed for a specific purpose