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Topic 5 forms of business ownership - Coggle Diagram
Topic 5 forms of business ownership
factor affecting choice
Start-up and future capital requirements
Control
Liability exposure
Management succession plans
Tax considerations
major forms
General Partnership
Limited Partnership
Sole proprietorship
Corporation
Sole Proprietorship
Advantages
Least costly form to begin
Least costly form to begin
Simple to create
Least costly form to begin
Disadvantages
Limited access to capital
Lack of continuity of the business
Lack of continuity of the business
Unlimited personal liability
Partnership
Advantages
Complementary skills of partners
Division of profits
Easy to establish
Type of partner
General Partners
Limited Partners
Silent Partners
Dormant Partners
Disadvantages
Capital accumulation
Potential for personality and authority conflicts
Unlimited liability of at least one partner
Partnership agreement
Location of the business
Duration of partnership
Purpose of business
Contributions of each partner
Name of partnership
Corporation
Types of corporation
Public held
Closely held
Disadvantages
Cost and time involved in the incorporation process
Double taxation
Traditional form of incorporation
Advantages
Ability to attract capital
Private placement
Limited liability of stockholders
Transferable ownership