Chapter 7 Flashcards
(12 cards)
What are the advantages of sole proprietorship?
- freedom to enter and exit the market easily
- freedom from external control
- freedom from paying excessive taxes
- freedom from being a employee
- freedom to retain info
What are the disadvantages of sole proprietorship?
- unlimited personal financial liability
- limited management and employee skills
- limited life
- limited availability of money
What are the advantages of a partnership?
- greater management skills
- greater possibility of keeping competent employees
- greater sources of financing
- ease of formation
- freedom to manage
What are the disadvantages of a partnership?
- Unlimited personal financial liability
- uncertain life
- conflict between partners
What does it mean to be surety for someone?
the act of becoming security for or pledging to undertake another’s debt.
What are the two forms of partnership?
- general partnership
- limited partnership
According to the law, what is a corporation, and what are its important properties?
A corporation is a artificial being that is invisible, intangible, existing only through contemplation of the law. It’s important properties are: immortality and individuality
How does one become a partial owner of a corporation?
By buying shares of stock
What are the advantages of incorporation?
- limited personal financial liability of stockholders
- experienced management
- specialized employees
- continuous life
- ease raising financial capital
What are the disadvantages of incorporation?
- higher taxes
- greater governmental regulation
- lack of secrecy
- impersonality
- rigidity
What are the two biblical principles on partnerships discussed in the text?
Warnings against unequally yoking and becoming surety
An LLC combines the benefits of which two forms of business
ownership?
Partnership and corporation
