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Chapter_1 - CHAPTER 1 Forms of Ownership 1 Proprietorship...

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CHAPTER 1 Forms of Ownership: 1. Proprietorship is a form of ownership with only one owner. Advantages include; Simple to create or end, The owner has complete control of the business, and There are tax advantages. Disadvantages include; Unlimited liability, The business is confined to the abilities and resources of the one owner. 2. Partnership is a form of ownership with two or more owners. Advantages include; Simple to create A small group of people still have control There are tax advantages Disadvantages include, Unlimited liability Unless restricted all owners have the right to run the business resulting in possible confusion 3. Corporation is a form of ownership that creates an artificial person, the corporation. This causes the owners to be legally one step removed from the business. See below. Advantages include; Limited liability Ease of expansion (raising funds) Ease of transferring ownership Disadvantages include; More paperwork related to the form of ownership, including sending corporate statements to the state that issued the corporate charter. Fees from the state of incorporation Tax disadvantages
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The corporation is an artificial legal person. Investors submit articles of incorporation to a state and receive a charter creating the corporation.
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