3 types of businesses
- Structure- a business that 2 or more people own. Legal agreement (Articles of partnership)
- Types- General, Limited
- Advantages- sharing ownership, can bring in more partners to raise money, larger size- more effecient operations
- Disadantages- Legal structure is complicated (new agreement when people leave or are added), Unlimited liability (fully responsible for all debts)
- Structure- organized business recognized by law that has many of the rights and responsibilities of an individual
- Strucutre- Charter- government doc. granting premission to organize- must include members, stock, stockholders, purpose, address, and other features.
- Advantages- Ease of raising finicial capital, can grow huge
- Disadvantages- Forming a corporation requires more time and money than forming other business structures, Governmental agencies monitor corporations, which may result in added paperwork,
- Disadvantages- Corporate profits may be subject to higher overall taxes since the government taxes profits at the corporate level and again at the individual level, if such profits are distributed to the shareholders. Furthermore, a corporation may not deduce from its business income any dividends it pays to its shareholders.
- Strucutre- operated by a single person
- Advantages- recieves all profits, makes the decisions,
- disadvantages- unlimited liability, dificult to raise finicaial capital (money to raise a business), unable to grow larger, attracting qualified employees, paid vacations, sick leaves, health and med insurance.