Sole Prop
What happens if the owner dies?
the business dissolves
a participant in a partnership who has unlimited personal liability and takes full responsibility for managing the business.
general partner
What are the three major types of corporations
C-Corporations, Subchapter S Corporations, and Nonprofit Corporations
an owner of shares of stock in a corporation.
shareholder
How much does it cost to set up a corporation?
between $500-2500
What is the tax structure of a sole proprietorship?
The business itself pays no taxes (because it is not separate from the owner)
partner whose liability is limited to his or her investment.
limited partner
What is the most common type of corporation?
C-corporation
they are liable only up to the amount of their individual investment
limited liability
What type of business is most commonly a cash business (restaurants, hair salons, bowling allies)?
Subchapter S Corporations
If you are a vendor or retailor what do you have to obtain from the state department of revenue?
sales tax identification number
All partnerships must have at least one ____________
general partner
This type of corporation can have no more than 75 shareholders.
What is a subchapter s corporation?
full responsibility for all debts and actions of the business.
unlimited liability
What type of businesses are usually LLCs
Medical and law firms
What do you have to file if you are doing business under another name?
DBA "doing business as"
What is the document where they write out the responsibilities and profit sharing among partners and spell out what happens if one partner dies or quits.
partnership agreement
Who makes decisions and selects officers to run the company in a corporation?
Board of Directors
an entity that pays taxes on earnings.
C-Corporation
Name the 3 types of nonprofit corporations
What are charity, public benefit, and mutual benefit
List 3 advantages and 3 disadvantages
Advantages
Easy and Inexpensive to create
Owner has complete authority over all business activities
Owner receives all the profits
Least Regulated form of ownership
Business itself pays no taxes (because it is not separate from the owner)
Disadvantages
Owner has unlimited liability (full responsibility for all debts and actions of the business).
Raising capital may be more difficult
Limited by total reliance on the abilities and skills of the owner
Death of the owner automatically dissolves the business
List 3 advantages and 3 disadvantages
Advantages
Easy and Inexpensive to create
General partners have complete control over the business
Owner receives all the profits
Partners can share ideas
Easier the secure investment capital and in greater amounts
Disadvantages
Difficult to dissolve one partner’s interest in the business without dissolving the partnership
Personality conflicts amount partners
Partners can be held liable for each other’s actions
Attorneys need to file __________ with the state and issue stock.
certificate of incorporation
a corporation that is taxed like a partnership.
Subchapter S Corporation
Name 5 advantages of corporations
Advantages
Status - an officially incorporated business has a more professional appearance.
Ability to secure business loans
Corporate shareholders have limited liability (they are liable only up to the amount of their individual investment)
Perpetual existence - continuous life regardless of changes in ownership
Employee Benefits - pension, retirement funds, profit sharing plans
Tax Advantages - can deduct expenses from their reportable income.