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Business Ownership (Corporation (Artificial person created by law, with…

- - - - Set Company goals
      - Develop general plans/strategies
      - Overall operation/appointing corporate officers
    - - Help board make plans, hire, daily activities
        
        President
        
        Chairman of the Board
        
        Secretary
        
        Treasurer
  - - - Corporation's assets are what creditors claim in case of lawsuit or failure of corporation
    - - Raise additional sums of money by selling stock
    - - The corporation does not cease to operate after a withdrawal, death, or incompetence of an individual.
  - - - Stress to increase sales revenue
      - Stress to reduce expenses
      - Stress to increase profits
      - Lay-off employees
      - Reduce salary of employees
    - - Corporate income
      - Personal income of stockholders
- - - - No attorney needed
    - - Proud of his/her accomplishment
      - Credit for solving day-to-day issues
    - - Strong incentive to succeed
      - Attractive incentive
      - Great satisfaction/idea
    - - Profits taxed as personal income of the owner
    - - Make every decision for the business
      - Make your own schedule
      - You are the superior authority
  - - - Business owner is personally responsible for all the debts of the business
      - Owner's personal property could be taken and sold if necessary
    - - If illness or death occurs to the owner, the business will cease
        
        Unless it is a profitable enterprise
        
        Unless his/her heirs will take over
    - - Who will repay the loan if the owner passes away?
      - Limited ability to to borrow $$$
    - - May need to hire people to work for you
        
        Employees
        
        Managers
        
        Accountants
        
        Janitors
- - - - Person who has full/shared responsibility of the business operation
      - Unlimited liability of debts
      - Must give notice to creditors, customers, and suppliers once the partner withdraws from the business
    - - Person who invests money in the business with no management duties/responsibility or liability
      - Receives portion of profits and tax benefits
      - Articles of Partnership
        
        Agreement stating the terms of the partnership
        
        Written or oral
      - Advantages
        
        Simple to start a partnership
        
        Partners pool their funds
        
        Allows for more capital availability
        
        Approve larger loans
        
        Extend more credit
        
        Operating a business with the help of another person = A strong motivating force
        
        Pooled talents
        
        One's weakness may be the other's strong suit
        
        All profits belong to the owners
        
        No income tax
      - Disadvantages
        
        Unlimited liability for the general partner
        
        Each partner is responsible for debts, taxes, or actions incurred despite whose fault it was
        
        One partner may do something that makes the other partner uncomfortable
        
        Bringing a spouse or relative into the business
        
        A partner wants wanting to withdraw more money from the business
        
        Partnerships are terminated after a general partner passes away