Forms of

Business Organizations

All by yourself?

Sole Proprietorship

Owned by one person

Owner keeps all the profits

Relatively unlimited control

Easy to form

No separation of owner from business

Owner responsible for all debts/liabilities

Business and personal property can be seized

How can I start one?

How can I start one?

Few legal requirements

Can be run from a home, garage, or van

Do you have a friend…

Do you have a friend…

and a good idea?

Partnerships

Owned by two or more people

Share profits equally (unless otherwise agreed upon)

Owners share all the risks equally

Fully liable without limit (similar to a sole proprietorship)

Partnerships

Forming a

Partnership

Partnership Agreement

More difficult than a sole proprietorship

Corporations

Corporations Legal entity/artificial person

Separate from its owners

Corporations Owners risk losing their investments

Owners do not lose personal assets

Harder to form

Corporations State Charter and Organizational Fees

Let’s

Review

Sole Proprietorship Requirements for Organization

Legal Status

Liability

Management

Dissolution

Ease of formation

Duration

None Owner is the business Unlimited Liability Owner decides Owner decides/death Just do it Death or disinterest

Requirements for Organization

Legal Status

Liability

Management

Dissolution

Ease of formation

Duration

Agreement of Parties Owners not a separate entity Unlimited Liability Owner have equal say Owners decides/death/ withdrawal/Bankruptcy Moderately Hard Withdrawal/Bankruptcy

Partnership

Requirements for Organization

Legal Status

Liability

Management

Dissolution

Ease of formation

Duration

State Charter/Org. Fees Separate entity from Owners Limited liability of Shareholders Directors set policy and Appoint officers Does necessarily end Difficult Can be perpetual

Corporations

Any Questions?

Any Questions?

mr.dc.robertson@gmail.com slideshare.net/Giratorio

youtube.com/user/MrTeachingTech

D. Casey Robertson

Resources: http://www.paopen4businessbriefcase.state.pa.us/BStructure/SoleProp.asp

http://www.portal.state.pa.us/portal/server.pt/community/reources/8826/corporation/533420

http://www.portal.state.pa.us/portal/server.pt/community/reources/8826/general_partnership/533421

http://www.dos.state.pa.us/portal/server.pt/community/business-related_boards/13772

http://www.allbusiness.com/business-planning/business-structures-corporations/686-1.html

http://www.dos.state.pa.us/portal/server.pt/community/corporations/12457/forms/571880