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Options for Organizing Business (Corporations (Types (Domestic, Foreign,…
Options for Organizing Business
Sole Proprietorships
Business owned by one person
Advantages
Simple Management Structure
Ease and Cost of Formation
Secrecy
Flexibilty
Government Regulation
Closing the Business
Disadvantages
Unlimited Liability
Limited Sources of Funds
Limited Skills
Lack of Continuity
Lack of Qualified Employees
Partnerships
An association of two or more persons who carry on as co-owners of a business profit
Types
General
Limited
Advantages
Ease of Organization
Availability of Capital and Credit
Combined Knowledge and Skills
Decision Making
Regulatory Controls
Disadvantages
Unlimited LIability
Business Responsibilty
Life of Partnership
Terminated upon the death of partner
Distribution of Profits
Limited Sources of Funds
Corporations
Legal entity created by the state
Types
Domestic
Foreign
Alien
Private
Public
Quasi-public
Nonprofit
Elements
The Board of Directors
Stock Ownership
Preferred Stock
Common Stock
Advantages
Limited Liability
Ease of Transfer of Ownership
Perpetual Life
External Sources of Funds
Expansion Potential
Disadvantages
Double Taxation
Forming a Corporation
Disclosure of Information
Employee-Owner Separation