Business ownership Flashcards Preview

Intro To Business And Technology > Business ownership > Flashcards

Flashcards in Business ownership Deck (9)
Loading flashcards...

What are 3 disadvantages of sole proprietorships?

●Unlimited liability
●Difficulty in raising financial capital
●Responsible for all losses
●Management knowledge may be limited


What is a Sole Proprietorship?

A business that is owned and managed by one individual who receives all the profits and bears all the losses


Benefits of a Sole proprietorship

●Ease of starting and going out of business
●Control over profits and business operations
●Pride of ownership
●Lower taxes (pays no corporate income taxes)


What is a partnership

A business that is owned and managed by two or more individuals who receive all the profits and bear all the losses.


Benefits of a Partnership

●Easier to raise financial capital
●Partners may combine managerial skills
●Personal satisfaction
●Lower taxes (pays no corporate income taxes)


Disadvantages of Partnership

●Unlimited liability
●Shared Profits
●Possible conflicts between partners
●Possible instability after the death of a partner


What are corporations?

A business that is owned by stockholders and has rights and responsibilities as if it were a person.


Benefits of a corporation

●Limited liability
●Greater financial capital
●Unlimited life
●Specialized management


Disadvantages of a corporation

●Increased taxation (pays corporate income taxes)
●Difficulty in starting (each state has its own rules for a corporate charter
●May be larger, more bureaucratic than other forms of business
●Increased government control