Forms of Business Organization - Ownership Flashcards
(12 cards)
Sole Proprietorship?
O - Owned and run by one person
U - has unlimited liabilities for all obligations incurred by the business
A - all assets belong to the owner
Advantatges of sole proprietorship?
G - gets all the money
E - easy and least expensive to organize
L - less requirements
C - complete control
Disadvantages of sole proprietorship
H - hard time attracting high calliber
E- employees
L - limited to the life of the owner
P - personal funds to start
R - responsible for all debts
Partnership (3 types)
owned by 2 or more people
1. General
2. Limited
3. Joint Venture
General Partnership?
Mitosis and the moms divide responsibility for management, equal shares assumed
partners equally divide responsibility for management
equal shares are assumed
Limited Partnership?
Limited Lifeless flies own stocks/ bonds, most partners are limilied liability, limited inputs, lazy and passive income
owning stocks/bonds
most partners have limited liability, limited inputs
limited partner gets passive income
Joint Venture?
Fast Birds, limited to a period of time, divide responsibilities
Limited period of time, partners equally divide responsibilities
Advantages of Partnership?
S - skills of the partner may help the business
S - shared decision making
E - easy to establish
A - ability to raise funds may increase
P - prospective employees maybe attracted to the business if given the incentive to become a partner
Disadvantages of a Partnership?
J - jointly liable for each others actions
D - disagreements can occur
P - partnership has a limited life
P - profits are shares
Corporation?
legal entity directed/owned by a board of directors
Advantages of a corporation?
L - Limited liability
O - ownership is separate from owner/sharholders
P - perpetual life
Disadvantages of a corporation?
S - subject to legal restrictions
I - incorporating process involves time and money
L - legal advice to establish and maintain
