Forms Of Ownership WOB Flashcards
1
Q
Sole Propietorship
A
Company owned by one person
2
Q
Sole Proprietorship has ——- ———.
A
Unlimited Liability
3
Q
What are 4 advantages of Sole Propietorship
A
- simple
- single layer of taxes
- private
- control and flexibility over company
4
Q
What are 4 disadvantages of Sole Proprietorship
A
Unlimited liabilities
- on your own
- shorter life span
- resource limitation
5
Q
Partnerships
A
Unincorporated company owned by 2 or more people
6
Q
4 Advantages of Partnership
A
- simple
- single layer of tax
- more resources
- cost sharing
7
Q
4 Disadvantages of Partnership
A
- unlimited liability
- potential conflict
- expansion issues
- termination issues
8
Q
Corporation
A
Legal entity different from any individual person
9
Q
Who owns a corporation?
A
Owned by shareholders
10
Q
Private vs Public Corporation
A
Private: public cannot buy stock
Public: anyone can buy stock
11
Q
4 Advantages of Corporations
A
- limited liability
- longevity
- ability to raise capital
- liquidity
12
Q
Longevity
A
Lasts a long time
13
Q
5 Disadvantages of Corporations
A
- double taxation
- possible loss of control
- reporting requirements
- cost
- complexity
14
Q
Longevity
A
Lasts a long time
15
Q
Definition of Board of Directors
A
Group of professionals elected by shareholders
