Entrepreneurship + Forms of Business Ownership Flashcards
Limited liability
- not responsible for business debts
- not responsible for obligations of that corporations
Unlimited liability
- responsible for all legal obligations
😁😁😁😁😁😁😁😁😁😁
#veryscary
*everything of yours could be taken away
General partner
Working with one other person
Limited partner
Involves about 2 or more people
Board of directors
Multiple please are running it
All as equal as the other
Sole-proprietorship
Someone who owns their own business
- dog walking, lawn care, babysitting
Advantages of a sole-proprietorship
- no legal paperwork
- less taxes
Disadvantages of a sole-proprietorship
- can be sued for everything you have (even personally!)
- larger workload
Partnership
- a business where very few people own
Advantages of a partnership
- taxed only once
- no legal forms
- less of a workload (vs running it individually)
Disadvantages of a partnership
- more people to share profits with
- can easily dissolve
Corporation
Independent legal company
Often time, have share holders
Advantages of a corporation
- more money for investments
- limited liability
- separates management
- perpetual life
- large in size
Disadvantages of a corporation
- initial cost
- paperwork
- 2 TAX RETURNS ( lose a ton of income)
- hard to end
Franchise
” chain stores” multiple people own different locations of the exact same thing
Advantages of a franchise
- Great success right (compared to non franchise places)
- corporate helps a ton (u need to know very little to open one)
Disadvantages of a franchise
- can’t do what ever u want
- start up free
Corporations are taxed 2 times, for what??
- federal taxes
- state taxes
What form of ownership makes the most money in the US??
Corporate
5 common traits of an entrepreneur
- persistent
- creative
- independent
- risk takers
- willing to fail
General partnership
- all equal
- label for each others actions
Limited partnership
- often time investor
- who don’t own or have much say in the corporation
Vertical merge
- 2 companies that merge naturally
Ex.
Nike buys out the company that makes the shoe laces they use in their shoes
Horizontal merge
- 2 similar businesses become 1
Ex
Nike and Adidas becoming one
Conglomerate Merge
- 2 totally different companies becoming one
Ex
Kraft and toblerone (chocolate)
Kraft and Hane’s (underwear)
Royalty fee
- amount of sales given back to corporate
Renewal fee
- payed every couple of years to maintain the persons absoltky to run that store
Entrepreneur
- organized and operates a business
- larger then normal risks
Aquisition
- buy entire company
• including their debts
