COB Notes Chapter 5 - Corporations Private Not traded on...

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Introduction to Business Chapter 5 Basic Forms of Business Ownership Sole proprietorship 72% Partnership 8% Corporation 20% Sole Proprietorship Advantages Ease of start/end Be your own boss Pride of ownership Leave of legacy Retain profit No special taxes Disadvantages Unlimited liability Limited financial resources Management difficulty Time commitment Few fringe benefits Limited growth Limited life span Partnership Advantages More financial resources Shared management Longer survival No special taxes Disadvantages Unlimited liabilities Division of profits Disagreements among partners Difficult to terminate
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Unformatted text preview: Corporations Private: Not traded on any stock exchange Public: shares are traded on one or more stock exchange Non-profit” performs public services, has special tax consideration Corporation Advantages • Limited liability • More money for investment • Size • Perpetual life • Ease of ownership change • Ease of drawing talented employees • Separation of ownership/mgmt. Disadvantages • Extensive paperwork • Double taxation • Two tax returns • Size • Termination difficult • Conflict with stockholder & board • Initial cost...
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