1. PowerPoint Presentation  Section 7.2  Pages 113-117

2. What you’ll learn  The benefits and costs of setting up a corporation  The differences between a C-corporation and a Subchapter S corporation  How a limited liability company works 7.2 Corporations

3. Why it’s important  In a corporation, the owner or owners of a business are protected from liability for the actions of the company. 7.2 Corporations

4. Key Terms corporation C-corporation C-corporation limited liability limited liability Subchapter S corporation Subchapter S corporation nonprofit corporation nonprofit corporation Limited Liability Company Limited Liability Company 7.2 Corporations

5. I. CORPORATE FORMS Corporations protect owners from liabilities. 7.2 Corporations

6. II. WHAT IS A CORPORATION? A.A corporation is a business that is chartered, or registered, by a state. B.A corporation legally operates apart from its owner or owners. 7.2 Corporations

7. III. C-CORPORATIONS The C-corporation protects an entrepreneur from being sued for all debts of the corporation.

8. 7.2 Corporations IV. C-CORPORATION ADVANTAGES A. A C-Corporation can raise money by issuing shares of stock.

9. 7.2 Corporations 1. Common stock holders have voting rights. 2. Preferred stock owners also receive their investment back first in case of business failure.

10. 7.2 Corporations B. A corporation also offers its owners, or shareholders, limited liability. The owners are only liable up to their individual investments.

11. 7.2 Corporations C. Corporations can create pension, retirement, and profit sharing plans.

12. 7.2 Corporations V. C-CORPORATION DISADVANTAGES A. It can cost between $500 and $2,500 in fees to create a C-corporation. B. Corporate income is heavily taxed.

13. 7.2 Corporations VI. SUBCHAPTER S CORPORATIONS A Subchapter S corporation is taxed like a sole proprietorship or partnership.

14. 7.2 Corporations VII. NONPROFIT CORPORATIONS Nonprofit corporations are legal entities that take money for reasons other than the owners’ profit.

15. 7.2 Corporations A. Charity B. Public benefit C. Religion D. Mutual benefit

16. 7.2 Corporations VIII. LIMITED LIABILITY CORPORATIONS LLCs benefit from the limited liability of a corporation and the tax advantages of a partnership.

17. 7.2 Corporations End of Section 7.2