Forms of Ownership

In this form of ownership, the owner has unlimited liability and enjoys all of the profits

• Sole Proprietor

• Partnership

• Corporation

• Franchise

The debts of the business may be paid from the personal assets of the owner

• Safety net
• Limited Liability
• Corporate Stock
• Unlimited Liability

Disadvantage of a Sole Proprietorship:

• Inexpensive to create
• Make your own decisions
• Least regulated
• Unlimited liability

When both partners have unlimited personal liability and take full responsibility

• General Partnership
• Limited Partnership
• Joint venture
• Strategic Alliance

Business ownership in which 2 or more people share assets, liabilities, and profit

• Sole Proprietor
• Partnership
• Corporation
• Franchise

Advantage of a Partnership

• Easier to raise capital
• Share profit
• Legally responsible
• Unlimited liability

Alternative approach for starting a company

• Sole proprietor
• Partnership
• Corporation
• Franchising

Why is it a good idea to create a partnership agreement?

• ALL are correct.

• To separate the business, if necessary

• To have a dispute resolution plan

• In case of the untimely death of a partner

What is the most significant risk factor in a sole proprietorship?

• Having no regular schedule

• Doing all of the work

• Having to answer to a board of directors

• Unlimited liability, even for employee actions

How are taxes handled in a partnership form of business ownership?

• The business passes only its profits to the owners, and they claim the profits on their personal tax return.

• The business passes its profits and losses to the owners, and they claim the profits and losses on their personal tax return.

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• The business passes its profits and losses to the owners, and they claim the profits and losses on their sole proprietorship tax return.