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13 Cards in this Set
- Front
- Back
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Advantages to Sole Propietorships
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Easy to start (flexibility)
Simple tax rules: business income = personal income. |
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Disadvantages to Sole Propietorships
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Unlimited Liability
Limited Resources available: Financial support, Human Resources. Limited growth potential |
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Advantages of Partnerships
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More resources available
Can share the load Longer survival (in case of depature of partner) No Special Taxes |
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Disadvantages of Partnerships
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Unlimited Liability in soem forms
Division of Profit Potential for disagreements Exit conditions must be spelled out in partnership agreement |
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What are the two types of Partnerships
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General and Limited
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What is a General Partnership
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Each partner manages the firm and each has unlimited liability
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What is a Limited Partnership
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At least one general partner. The rest are silent partners, meaning they cannot actively manage the firm. They are passive investors.
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What are the main advantages of incorporating a business
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Limited Liability
More money can be raised |
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What are advantages of corporations?
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Limited Liability
Greater access to cash Separation of ownership from management Ease of ownership transfer |
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Disadvantages of corporations
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More costly to form
must keep accurate records potential for conflict with BOD taxed 2 times if dividends given separation of ownership from management |
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What is a Private/Closely Held corporation
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Not traded on any stock exchange; stock held only by a few. Don't have to share financials with outsiders
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What is a public corporation
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shares are traded on stock exchanges. Widely held by many people and institutions
Financial statements are open to the public. |
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Non-Profit Corporation?
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Performs public service
Special tax considerations |
