1. Describe the basic features that distinguish the four basic forms of business ownership: sole proprietorships, general partnerships, C corporations, and limited liability companies.
Sole proprietorships are a business that is owned and managed by a single individual. This is a simple extension of the owner.
General partnership gives each partner the right to participate in the company’s management and their funds. However, they are all responsible for any debt that is acquired.
C Corporations are the most common type of corporations. Has limited liability to all of its owners who are stockholders.
Limited liability companies are owners that are not liable for claims against their firm. They may lose their investment in the company, but not their personal assets. 2. Describe the relationship between a corporation’s common stockholders, its board of directors, and its chief executive officer (CEO).
Stockholders are owners of the corporation.
Boards of directors are elected by the stockholders of the corporation to represent their interest. Board of directors relies on the board to oversee the operation of their company to protect their interest.
Chief executive officers are the ones over the company and the one that looks over everything. The CEO is more involved over the daily activities.
They all have a duty to overlook and make sure the company is being run in the right way. They make sure all the tasks are being completed as they should be.
3. There are two
| A general partnership is comprised of a group of two or more individuals who enter into an agreement to start a business. The partners and the business are legally the same. The partners enter into an agreement called the articles of partnership and are typically equally active in the business and the business’s management, unless otherwise stated in the partnership agreement. All profits and losses are shared by the partners in a joint business venture.
Limited liability means it does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, his or her liability is restricted to the
SOLE PROPRIETORSHIP: Sole proprietorships are the most common form of business in the United States. You and your business are one in the same. While being your own boss as its advantages, like working your own hours and collecting all profits made by the business, there are some disadvantages. For starters is coming up with starting working capital. Most Sole Proprietors have to seek funds from other sources.
Many believe that liability is a biggest issue in a general partnership than in a sole proprietorship. The owners of the company are still fully liable for any debts the company may accrue as well as the liability for any lawsuits that may be brought against the company. However, the bigger issue in a partnership is that now each partner can be liable for the other partner’s actions. If one partner is sued for malpractice, the other partner may suffer because of it.
1. Describe the basic features that distinguish the four basic forms of business ownership: sole proprietorships, general partnerships, C corporations, and limited liability companies.
Sole Proprietorship Sole proprietorship is the most common form of business in the United States. It is a relatively simple way for an individual to start a business since legal costs and business requirements are minimal, and the owner has complete control over the business. Though a sole proprietor is not responsible for any corporate tax payments, the owner is responsible for taxes incurred on the income generated from the business as part of his or her personal income tax payments, and personally shoulders any other risks or obligations. A sole proprietor may also choose to file their business under a fictitious business name or a DBA (doing business as), allowing him or her to operate and market the business under a more typical
Control- The general partner(s) maintain control of the business. They have equal authority unless otherwise specified in a agreement. The limited partners do not maintain any control in the partnership.
CONTROL- Shareholders do not typically manage the company’s business. Instead a board of directors is elected. The board of directors has direct control over the company. A board member can also be a shareholder.
A1a: The Sole Proprietorship is the most common business form in the U.S. It offers the advantages of no-cost, easy startup, and full owner/operator autonomy with regard to business decisions.
responsible for business debt, and has one or more limited partnership who are only liable to
Joshua Kennon (2007), stated that “The board of directors is the highest governing authority within the management structure at any publicly traded company and is usually made up of the directors who are elected for a specific number of years by the shareholders”. According to Wikipedia,” A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization”.
Limited partnership: Owners are distinguished as either general or limited partners. Limited partners are only liable about their contribution to the partnership involving funds, equipment and other property.
Is the most common business type, where the business is operated and owned by a single individual. In this type of business, the sole proprietor provides capital, does not share profit or loss and runs the business alone. As such, the business and the owner are indistinguishable for tax and legal purposes (Dlabay, 2011). To differentiate this business from other business types, a sole proprietorship is discussed under the following characteristics.
Describe the basic features that distinguish the four basic forms of business ownership: sole proprietorships, general partnerships, C corporations, and limited liability companies.
Like most multinational corporations, the shareholders own the company and they may also be the board of directors. A Chief Executive Officer (CEO) will be appointed to nominate and manage the operation of the company as a whole. A Chief Operating Officer (COO) will be managing the company’s day-to-day operations and reports them to CEO. The Chief Financial Officer (CFO) will be managing the finance and account together with the