Chapter 1 Notes.docx - Chapter1Notes 1.Soleproprietorship...

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Chapter 1 Notes Forms of Business organization 1. Sole proprietorship -Easy to set up -Owned by one -Small service-type business -Tax advantages -Personally liable for debts -Financing difficult -Transfer of ownership difficult 2. Partnership -Owned by 2+ -Each partner brings unique skills and resources -Retail and service-type businesses -Tax advantages -Personally liable for debts -Financing difficult -Transfer of ownership difficult 3. Corporation -Separate legal entity -Easier to raise funds (ownership in shares of stock) -Stockholders have no personal liability -Corporate taxes -More regulations and rules to follow Ethics -2002 Sarbanes-Oxley Act (SOX) to reduce unethical corporate behavior and decrease the likelihood of  future corporate scandals  -FRAUD Business Activities -Financing: raise money -Investing: buy assets -IPO: Initial Public Offer

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