Chapter 3: Forms of Ownership of Small Business Flashcards
Proprietorship
a.k.a. Sole Proprietorship; Business owned by 1 Person
Partnership
Business owned by 2+ Persons who have Unlimited Liability for its Debts & Obligations
General Partnership
each partner actively participates as an equal in managing the business and being liable for the acts of other partners
Limited Partnership
1+ General Partners conduct the business, while 1+ Limited Partners contribute Capital but are not liable for debt of the General Partners
Articles of Copartnership
Drawn up during the Pre-operating Period to Show Rights, Duties, & Responsibilities of each partner
Corporation
Business formed and owned by a group of people called Stockholders, given special Rights, Privileges, & Limited Liabilities by Law
C Corporation
Regular Corporation that provides the protection of limited liability for shareholders, but its earnings are taxed at both the corporate and shareholder level
Articles of Incoporation
Instrument by which a corporation is formed under the corporation laws of a given state
Corporate Charter
States what the business can do & provides other organizational and Financial Information
Buy-Sell Agreement
Explains how Stockholders can Buy Out each other’s interest
S Corporation
Special type of corporation that is exempt from multiple taxation & excessive paperwork
Limited-Liability Company (LLC)
Combines the advantages of.a corporation, such as liability protection, with the benefits of partnership, such as tax advantages
Limited-Liability Partnership (LLP)
Organized to protect individual partners from personal liability for the negligent acts of other partners or employees
Family Limited Partnership (FLP)
Organizational type where the majority of the partners are related to each other as spouses, parents, grandparents, siblings, cousins, nieces, or nephs.
Professional Service Corporation (PSC)
Must be organized for the sole purpose of providing a professional service for which each shareholder is licensed
