Midterm 3 Flashcards
Pros of a Sole Proprietorship
Easy, Cheap, and Quick
Cons of a Sole Proprietorship
Based on own Credit, Unlimited Liability, Limited Lifespan
Pros of Partnership
More Control and Single Taxation
Cons of Partnership
Unlimited Liability, Limited Lifespan, and Limited Access to Capital
Pros of Cooperations
Unlimited Lifespan, Unlimited Liability, Separate Legal Entity
Cons of Cooperations
Double Taxation
Key Points of a General Partnership
Share Risk and Wealth Equally, and Unlimited Agency
Key Points of a Limited Partnership
No Agency, Limited Liability, and Do Not Share Risk Equally
What Does Separate Legal Entity Mean
No Single Individual is Responsible
What Does the Securities and Exchange Commission (SEC) Do
Regulate the Sale of Stock, Find and Report Financial Information
Domestic Business
Operated within State of Incorporation
Foreign Business
Operated within another state than Incooperated in
Alien Business
Operated in another country than originated
What is the Legal Requirement of Cooperations
To Create Wealth for Stockholders
What is the B-Corps or Benefit Corps Motive
Business should aspire to do no harm and benefit all
What Are The 3P’s of Business
People, Planning, and Profit
Pros of a Limited Liability Company (LLC)
Low Taxation, Limited Liability, and No Cooperate Structure
What Does “Merger” mean
Two Firms Voluntary join into one
What Does “Acquisition” mean
One Firms buys another
What Does “Horizontal” mean
Acquiring another business in the same industry
What Does “Vertical” mean
Distribution Channels
What Does “Conglomerates” mean
Unrelated Businesses
What Do Sole Proprietorships Do
Introduce a form of risk
What Do You Need to Form A Cooperation
Need a Government Charter
What is a Big Disadvantage of Partnerships
Unlimited Liability
What Do Partnerships Have To Do to Raise More Capital
Get More Partners
In a General Partnership, each of liable for the debt they incure
False
What Can A Cooperation Do
Buy and Sell Property, Borrow Money, Sue In Court, and Be Sued
What Is a Right of Common Stockholders
Vote for the Board of Directors
What Do LLC Owners Have
Limited Liability
What is the Easiest Business to Form
A Sole Proprietorship
What Do Partnerships Follow
Mutual Agency
How Are Cooperations Taxed
Double
What Do All Company Types Have in Common
All Profits Belong to Owners
What is a Merger
When Two Firms Voluntarily form a New Firm together
What is a Pro of Cooperations
Smooth Transfer of Ownership
