Module 5 Flashcards
(33 cards)
gov’t operated
local/count/state/national govts typically fund and manage parks and rec, hs athletics, community centers, olympic programs
funded thru govt budgets/taxpayers
do not always run efficiently
goal of org may get lost
non profit orgs
provide programs for public benefit
can accept donations (tax deductible)
“profits” should be re invested
primary sources of revenue for non profits
membership and registration fees
broadcasting rights
sponsorship sales
sole proprietorship
single owner
most common structure
advantages of sole proprietorship
easy to form, manage, maneuver, and sell
low startup costs compared to other options
total control by single owner
no shared profits
disadvantages of sole proprietorship
limited ability to raise capital
owner takes on all loses
unlimited personal liability against owner
owner must be multi talented
limited long term stability for employees
general partnerships
classified by equal division of ownership
shared profits and liabilites
advantages of general partnerships
revenues taxed only once
flexibility
enhanced decision mak
disadvantages of general partnerships
liability is significant
ability to raise capital limited
possible limited managerial capability compared to corp
limited partnership
one owner acts as decision maker
rest only provide financial support
limited partners have limited liability
advantages of limited partnership
revenues taxed only once
flexibility
enhanced decision making
easy to form and sell
limited partnership disadvantages
liability significant
ability to raise capital limited
possible limited managerial capability compared to corp
c corporation
must comply with state laws
must develop and follow corp bylaws
can issue stock
shareholders
owners of corp
expects to see return on investment through dividends
hopefully increased value of holdings
board of directors
chosen by shareholders to determine policies and decisions
advantages of corp
liability protection for shareholders (cant lose more than invested)
ownership easily transferable
easier ability to hire talent
disadvantages of corp
complex to legally form
more stringent govt regulations
corporation answers to shareholders (can slow decision making)
subchapter s corporation
similar to c corp up to 35 shareholders can own subsidiaries and tax exempt orgs can issue stock recent reduction in popularity
advantages of subchatper s corp
ability to own other companies spreads out liability
disadvantages of subchapter s corp
must be based in us
partnerships, corps, & intl investors cannot invest (limits potential sources of income)
limited liability company (LLC)
rising in popularity mainly due to simplicity of formation
formed based on state guidelines
can be owned by other companies
advantages of llcs
generally classified as partnership for fed tax purposes (reduces overall income tax payments)
similar liability protection to corps
profit or non profit
disadvantages of llcs
relatively new
legal issues determined by state laws
laws can vary, no national regulation
uncertainty over law can reduce ability to raise funds
sole proprietorships and corps
weakness of one are strengths of other and vice versa
