1. Describe the characteristics, advantages & disadvantages of the sole proprietorship.

2. Understand the advantages & disadvantages of the partnership.

3. Describe the formation, structure, features, advantages & disadvantages of a corporation.

1. sole proprietorship 12. dividend

2. unlimited liability 13. bond3. inventory 14. principal4. limited life 15. interest5. partnership 16. double

taxation6. limited partnership7. bankruptcy8. corporation9. charter10. stock11. stockholder/shareholder

1. Most common form of business org. in the U.S.

2. Owned & run by 1 person

3. Smallest in size

4. Easiest to start up

1. Ease of start up

2. Ease of management

3. Ease of getting out

4. Do not have to share the profits

5. Don’t have to pay separate business taxes

6. Psychological satisfaction

1. Unlimited liability

2. Difficult to raise financial capital

3. Size & efficiency

4. Limited life

5. Limited managerial experience

6. Difficult to attract qualified employees

1. Jointly owned by 2 or more persons

2. Least numerous form

3. General part – all partners responsible

4. Limited – at least 1 partner isn’t active in running the business

1. Ease of establishment2. Ease of management3. Lack of special taxes4. Can attract financial capital5. Slightly larger size/more

efficient6. Easier to attract top talent

1. Each partner fully responsible for the acts of all other partners (General)

2. Conflict can occur between partners

3. Limited life

1. Recognized by law as a separate legal entity having the rights an individual has (buy/sell, enter into legal contracts, sue/be sued)

2. Charter issued by Nat’l or State govt

3. Specifies # of shares of stock

4. Shareholders will receive dividends if the business makes a profit

1. Common stock – basic ownership, receive a vote for each share

2. Preferred stock – nonvoting shares of ownership

3. Most shareholders do not vote; they turn their votes over to someone else

4. Account for 90% of all sales

1. Ease of raising financial capital

2. Hire professional managers to run it

3. Limited liability

4. Unlimited life

5. Ease of transferring ownership

1. Difficulty & expense of getting a charter

2. Double taxation

3. Subject to more govt regulation

4. Owners have little say in how the business is run

1. Describe the characteristics, advantages & disadvantages of the sole proprietorship.

2. Understand the advantages & disadvantages of the partnership.

3. Describe the formation, structure, features, advantages & disadvantages of a corporation.

1. sole proprietorship 12. dividend

2. unlimited liability 13. bond3. inventory 14. principal4. limited life 15. interest5. partnership 16. double

taxation6. limited partnership7. bankruptcy8. corporation9. charter10. stock11. stockholder/shareholder

1. Owned & run by one person

2. Earn 1/5 of total income of all businesses

3. Easiest form to start up

4. Most numerous & profitable of all organizations but smallest in size

1. Ease of start up

2. Ease of management

3. Do not have to share the profits

4. Don’t have to pay separate business income taxes

5. Psychological satisfaction

6. Ease of getting out

1. Difficulty in raising financial capital

2. Has limited life

3. Limited managerial experience

4. Unlimited liability

5. Smaller size & less efficiency

6. Difficulty of attracting qualified employees

1. Jointly owned by 2 or more persons

2. General – all partners are responsible for management/financial obligations

3. Limited – at least 1 partner is not active in running the business

4. Easy to start up

5. Least numerous form

1. Ease of establishment2. Partners bring different areas of

expertise3. Lack of special taxes4. Can attract more financial capital5. More efficient operations6. Easier attracting top talent to the

business7. Ease of management

1. Each partner fully responsible for acts of all other partners (General)

2. Conflict can occur between partners

3. Limited life

1. Recognized by law as separate legal entity having all the rights of an individual (buy/sell property, engage in contracts, sue/be sued)

2. Makes up 1/5 of all businesses & accounts for 90% of total sales

3. Must file for permission from the govt & obtain a charter

4. Charter specifies # of shares of stock

5. Stockholders own stock & can receive dividends if the business is successful

• Common stock – basic ownership of a corp, receive 1 vote for each share

• Preferred stock – nonvoting shares of ownership (receive dividends before common stockholders)

• Those who own few shares often do not vote but turn their votes over to someone else

1. Ease of raising financial capital

2. Hire professional managers to run it

3. Limited liability

4. Unlimited life – continues to exist if ownership changes

5. Ease of transferring ownership

1. Difficulty & expense of getting a charter

2. Owners have little say in how the business is run

3. Double taxation – pay taxes as corporate profits & personal income

4. Subject to more govt regulation