Chapter 6 - Forms of Business Ownership Flashcards
1
Q
Sole Proprietorship
A
a business that is owned, and usually managed, by one person.
2
Q
Partnership
A
a legal form of business with two or more parties.
3
Q
Corporation
A
a legal entity with authority to act and have liability separate from its owners
4
Q
Liability
A
includes the responsibility of a business to pay all normal debts and to pay because of a court order or law, for performance under a contract, or payment of damages to a person or property in an accident
5
Q
Sole Proprietorship - Advantages
A
Ease of starting and ending Be your own boss Pride of ownership Retain profit No special taxes Less regulation Unlimited liability
6
Q
Sole Proprietorship - Disadvantages
A
Limited financial resources Management difficulties Overwhelming time commitment Few fringe benefits Limited growth Limited lifespan Possibly pay higher taxes
7
Q
Partnership - Advantages
A
Limited financial resources Management difficulties Overwhelming time commitment Few fringe benefits Limited growth Limited lifespan Possibly pay higher taxes
8
Q
Partnership - Disadvantages
A
Unlimited liability
Division of profits
Disagreements among partners
Difficulty of
termination
Possibility of higher taxes
