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Options for Organizing Business

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priscila bravo

on 15 October 2016

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Transcript of Options for Organizing Business


Partnerships


Businesses owned and operated by one individual.
Sole Proprietorship
Partnerships
It is a legal document, that set forth the basic agreement between partners.
A legal entity, created by the state, whose assets and liabilities are separate from its owners.
Corporations
Ease and cost of formation
Advantages of Sole Proprietorships
Secrecy
Distribution and use of profits
Flexibility and Control of the Business
Government regulation
Taxation
Closing the business
Unlimited liability
Disadvantages of Sole Proprietorships
Limited sources of funds
Limited skills
Lack of continuity
Lack of qualified employees
Taxation
Sole Proprietorships
Corporations
A form of business organization defined by the Uniform Partnership Act as "an association of two or more persons who carry on as co-owners of a business for profit"
Types of Partnerships
Articles of Partnerships
A business organization that has at least one general, and at least one limited partner, whose liability is limited to his or her investment in the business.
Limited Partnerships
A partnership that involves a complete sharing in both management and the liability of the business
General Partnerships
Ex: Circo du Soleil
Ex: Oil-drilling partnerships, real estate partnerships.
Advantages of Partnerships
Ease of organization.
Availability of capital and credits.
Combined knowledge and skills
.
Decision making
Regulatory Control
Unlimited liability
Disadvantages of Partnerships
Business responsibility.
Life of partnership.
Distribution of profits
Limited sources of funds
Partnerships are Quasi-taxable organizations. Partnerships do not pay taxes.
Partners, must report their share of profits on their individual tax returns and pay taxes at the income tax rate for individual.
Taxation
Types of Corporations
A corporation owned by just one or few people who are closely involved in managing the business.
Private Corporation
A corporation whose stock anyone may buy, sell or trade.
Public Corporation
A Private Corporation can become
Public Corporation by Initial Public Offering. As well a Public Corporation, can be taken private, when select few people buy all the firm's stock.
Trivia: Which is the the third-largest IPO in U.S. history?
Types of Public Corporations
Corporations owned and operated by the federal, state, or local government.
Quasi-public Corporations
Nonprofit Corporations
Corporations that focus on providing a service rather than earning a profit but are not owned by a government entity.
The board of Directors.
Elements of a Corporation
A group of individuals, elected by the stockholders to oversee the general operation of the corporation, who set the corporation's long range objectives.
Stock Ownership
Preferred Stock
A special type of stock whose owners, though not
generally having a say in running the company, have a claim to profits before others stockholders do.
Common Stock
Stock whose owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends.
External sources of funds
Advantage of Corporations
Limited liability
Ease to transfer of ownership
Perpetual Life
Expansion potential
Employee-Owned separation
Disadvantages of Corporations
Double taxation
Disclosure of information
What do you think is better? a Sole Proprietorships, a Partnerships or a Corporation?
MUCHAS GRACIAS!
Full transcript