Unit 3: Chapter 7: Forms of Business Ownership Flashcards
Define the Term: Sole Proprietorship
A business firm that has one owner
What are the positives and negatives of a Sole Proprietorship
See pages 129-131
Define the Term: Partnership
A business that two or more persons as the owners
What are the pros and cons of a general partnership?
See pages 131-135
Define the Term: Limited partnership
A business structure where there is at least one general partner and one limited partner with fewer roles/responsibilities
Define the Term: Corportation
A business structure where the business is a separate entity from the ownership. Ownership is determined by number of shares owned by individuals
What are the pros and cons of a corporation?
See pages 135-140
What are the three basic forms of business organization?
Sole prop, partnership, corporation
What is the most common type of business structure in the U.S.?
Sole Propriotorship
What is the difference between an S-Corp and C-Corp?
In an S-Corp, profits from the business are passed on as taxed income to the shareholders. In a C-corp those profits stay in the business and the business pays the taxes
What is the primary advantage partnerships have over sole props?
Greater access to financial resources
What are the two qualities that corporations have that other business structures do not have?
Individuality and immortality
Who gets paid last in corporations?
Common Shareholders
