business ownership

Question 1

sole proprietorship

Answer 1

1 owner
+ full control, income is all yours, no special taxes, cheap, easy
- lack of skills, unlimited liability, harder management

Question 2

partnership

Answer 2

owner by 2 or more ppl
+ cheap, few government regulations, easier management, no special taxes, easier funding
- unlimited liability, share profit, possible arguments
limited partnership is the same, but there’s one general partner making decisions and etc. and others are limited partners

Question 3

partnership agreement

Answer 3

a document that specifies everyone’s rights and responsibilities

Question 4

corporation

Answer 4

a legal entity separate from it’s owners (shareholders, who invest money by buying stock)
+ limited liability, easier financing, attracts more talents
- goals may differ, double taxation, expensive to set up, many regulations

Question 5

s corporation

Answer 5

there are no more than 100 shareholders, all must be US citizens, individuals, estates or nonprofits
+ limited liability, no double taxation
- many requirements, no flexibility in distribution of profits( allocated based on % owned)

Question 6

LLC (limited liability corporation)

Answer 6

any number of members, any citizens
+ flexible profit allocation (members decide), few regulations, limited liability (with exceptions)
loan guarantee- a guarantee that shows you will pay your loan