Sole Proprietorship
What is a Sole Proprietor?
A sole proprietorship is the simplest and most common form of business organization in which a single individual, owns and operates a business.
What is a Partnership?
A partnership is a legal business structure in which two or more individuals or entities come together to jointly own and operate a business.
What is a Corporation?
A corporation is a legal entity that is separate from its owners. It is created by filing the necessary documents with the government and is typically characterized by limited liability for its shareholders.
Partnership + What? = An LLC?
Partnership + Corporation= LLC
What are 2 disadvantages of a Sole Proprietor?
Possible Answers:
1. Unlimited Personal Liability
2. Limited Access to Capital
3. Limited Expertise and Skills
4. Limited Capacity for Growth
in a general partnership, what is the primary feature that distinguishes it from a LLC
In a general partnership, both Partys are involved in day to day management and decision making, but in a LLC there are 2 types of partners. partners who have active roles and unlimited liability and limited partners who are not involved in day to day management
List 2 Advantages of a Corporation
Possible Answers:
1.Tax Planning Opportunities
2.Separation of Ownership and Management
3.Strong Regulatory Oversight
4.Brand Recognition
What are 2 Advantages of a LLC?
Possible Answers:
Limited Liability
Pass-Through Taxation
Flexible Management
Ease of Formation
What are 3 Advantages of a Sole Proprietor
Possible Answers:
1. Minimal Costs
2. Flexibility
3. Privacy
4. Tax Advantages
What are the 3 types of Partnerships?
1. General Partnership (GP)
2. Limited Partnership (LP)
3. Limited Liability Partnership (LLP)
List 3 Disadvantages of Corporation
Possible Answers:
1. Potential for Conflicts
2. Rigid Structure
3. Ownership Difficulties
4. Management Compensation
5. Risk of Hostile Takeovers
What are 3 disadvantages of an LLC?
High costs to start an LLC
1. Charged Taxes on parts of the income.
2. The inability to cash checks made out to the LLC.
3. The risk of dissolving the company if a member leaves, goes bankrupt, or dies.
4. Members must immediately recognize profits, unlike corporations
What are characteristics of a Sole Proprietorship?
Full Decision-Making Authority: The sole proprietor makes all business decisions, including those related to management, operations, and finances.
Limited Capital Resources: A sole proprietorship may face limitations in terms of access to capital and resources, as the business's ability to raise funds is primarily dependent on the proprietor's personal finances and credit.
Ownership Transfer: Transferring ownership or selling the business can be more challenging than with other business structures.
True or False: Is Pass-through taxation a characteristic of a Partnership?
False
who typically owns and governs the business in a corporation?
The Members.
Part A: Identify the three types of businesses and explain the advantages and disadvantages of each.
Part B: In addition, provide an example of each of these types of businesses in the US.
Answers will vary in explanation
Where would you commonly see a Sole proprietor?
Sole proprietorships are commonly found in small businesses, freelancers, independent consultants, and other solo ventures.
What are popular real-life examples of a Partnership?
GoPro & Red Bull
BMW & Louis Vuitton
Uber & Spotify
Apple & MasterCard
Airbnb & Flipboard
UNICEF & Target
Nike & Apple
Who has the richest corporation in the world?
The richest corporation in the world is Apple Inc. As of 2023, Apple has a market capitalization of 2.75 trillion U.S. dollars.
List 1 famous/popular LLC companies around the world.
1. Apple
2. Nike
Answers will vary per student responses