Different forms of business and the advantages and disadvantages of each (Sole proprietorship, partnership, corporations, LLCs, cooperatives, joint venture, franchise)
joint venture
2 or more business coming together for short period of time adv- beenfit of others knowledge, share risks and costs disadv- lead to conflicts, risk of control
Partnership Advantages
Ease of organization, Capital and credit, Knowledge and skills, Decision making, Regulatory controls
Partnership
General Partnership: Each partner is personally liable for the actions of all of the partners. You can personally be sued for any amounts owed. Limited Partnership: At least one general partner who runs the business and is responsible for its liabilities, Any number of limited partners who have limited involvement, Silent or involved, Losses are limited to the amount of their investment
Limited Liability Company
Hybrid business structure allowed by statestatute, Provides the limited liability features of a corporation, Provides tax efficiencies and operational flexibility of partnerships, Owners of an LLC are called members.
LLC advantages
Limited Liability, Less Record Keeping compared to an S Corporation, Sharing of Profits
LLC disadvantage
Possible Limited Life, self Employment Taxes
CORPORATIONS
Stockholders (or shareholders) are the owners of a corporation, holding shares of stock that provide them with certain rights. Board of Directors: elected to govern and handle the overall management of the corporation Picks CEO
partnership disadvantages
Unlimited liability, Business responsibility, Life of the partnership, Distribution of profits Limited sources of funds, Taxation of partnerships
disadvantages of sole proprietorship
Unlimited liability, Limited sources of funds, Limited skills, Lack of continuity, Lack of qualified employees, Hard to match wages, Taxation
Corporations Disadvantages
double taxation, forming a corporation, disclosure of information, employee owner separation
sole proprietership
established, owned, operated, and oftenfinanced by one person
franchise
just repeat and look at doc!
corporations advantages
limited liability, transfer or ownership, perpetual life, external funds, expansion proposal
Advantages of Sole Proprietorship
secrecy, Ease and cost of formation, Distribution and use of profits, Exclusively to the owner, Flexibility and control, Government regulation, Taxed at an individual rate
