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Starting a New Business

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by

desiree brown

on 25 April 2013

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Transcript of Starting a New Business

Business Ownership: Starting a Small Business • More financial resources.

• Shared management and pooled/
complementary skills and knowledge.

• Longer survival.

• No special taxes. General Partnership:

Limited Partnership:

Master Limited Partnership (MLP):

Limited Liability Partnership (LLP): General Partnership A partnership in which all owners share in operating the business and in assuming liability for the business’s debts. Disadvantages of Partnership• A partnership is a legal form of business with two or more owners Goal 1: adv/dis adv. of Sole Proprietorship Advantages of Partnership Types of Partnerships Goal 2: Differences between Partnership



A sole proprietorship is a type of business in which one person legally makes up the whole company. Advantages Ease of starting and ending business

Being your own boss

Pride of ownership

Leaving a legacy

Retention of company profits

No special taxes Disadvantages Partnership: When two or more people legally agree to become co-owners Three Basic Forms of Business Corporation: Legal entity with authority to act and have liability apart from its owners Limited Partner A partnership with one or more general partners and one or more limited partners Master Limited Partnership: Limited Liability ***there are unlimited liabilities A partnership that looks much like a corporation but is taxed like a partnership and thus avoids the corporate income tax. Limited Liability Partnership A partnership that limits partners’ risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of the people under their supervision. • Unlimited liability.
• Division of profits.
• Disagreements among partner.
• Difficulty of termination. Unlimited Liability

Limited Financial
Resources

Management
Difficulties

Overwhelming Time Commitment

Few Fringe Benefits

Limited Growth

Limited Life Spa Corporations A state-chartered legal entity with authority to act and have liability separate from its owners Advantages of a Corporation Disadvantages of Corporations Goal 3 Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships Compare the advantages and disadvantages of sole proprietorship First Three Goals Goal 2 Goal 1 Compare the advantages and disadvantages of corporations Limited Liability

Ability to Raise Money

Size

Enduring Life

Ease of Ownership Change

Ease of Attracting Talent

Separation of Ownership from Management Initial Cost

Extensive Paperwork

Double Taxation

Two Tax Returns

Size

Difficulty of Termination

Possible Conflicts S Corporations A unique government creation that looks like a corporation but is taxed like sole proprietorship and partnerships. In order to qualify as an S Corporation,
A COMPANY MUST Have no more than 100 shareholders.

Have individual shareholders that are citizens or residents of the US.

Have only one class of stock.

Derive no more than 25% of income from inactive sources. Limited Liability Companies A company similar to an S Corporation but without the special eligibility requirements. Advantages of LLC Limited Liability
Choice of Taxation
Flexible Ownership Rules
Operating Flexibility
Flexible Distribution Disadvantages of an LLC No Stock

Limited Life Span

Fewer Incentives

Taxes

Paperwork END OF OUR FIRST THREE GOALS Conventional (C) Corporation Sharing of ownership and profits without commitments. Legal entity with authority to act and have liability separate from owners. No loss beyond investments. Examples of Sole Proprietors Landscaper

Financial Planners

Catering Company

Housecleaning Service Sole Proprietorships
Partnerships
Corporations
Full transcript