Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
13 Cards in this Set
- Front
- Back
Advantages to Sole Propietorships
|
Easy to start (flexibility)
Simple tax rules: business income = personal income. |
|
Disadvantages to Sole Propietorships
|
Unlimited Liability
Limited Resources available: Financial support, Human Resources. Limited growth potential |
|
Advantages of Partnerships
|
More resources available
Can share the load Longer survival (in case of depature of partner) No Special Taxes |
|
Disadvantages of Partnerships
|
Unlimited Liability in soem forms
Division of Profit Potential for disagreements Exit conditions must be spelled out in partnership agreement |
|
What are the two types of Partnerships
|
General and Limited
|
|
What is a General Partnership
|
Each partner manages the firm and each has unlimited liability
|
|
What is a Limited Partnership
|
At least one general partner. The rest are silent partners, meaning they cannot actively manage the firm. They are passive investors.
|
|
What are the main advantages of incorporating a business
|
Limited Liability
More money can be raised |
|
What are advantages of corporations?
|
Limited Liability
Greater access to cash Separation of ownership from management Ease of ownership transfer |
|
Disadvantages of corporations
|
More costly to form
must keep accurate records potential for conflict with BOD taxed 2 times if dividends given separation of ownership from management |
|
What is a Private/Closely Held corporation
|
Not traded on any stock exchange; stock held only by a few. Don't have to share financials with outsiders
|
|
What is a public corporation
|
shares are traded on stock exchanges. Widely held by many people and institutions
Financial statements are open to the public. |
|
Non-Profit Corporation?
|
Performs public service
Special tax considerations |