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Lecture 8

ADM 1100 Lecture Notes - Lecture 8: Double Taxation, Small Business, Sole Proprietorship

Course Code
ADM 1100
Alan O' Sullivan

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Small business - An owner managed business with fewer than 100 employees (services less than
50 employees).
New venture (firm) - A recently formed (in the last 12 months) commercial organization that
provides goods and/ or services for sale.
Definition of entrepreneurship: The process of identifying an opportunity in the marketplace
and accessing the resources necessary to capitalize on that opportunity.
Identify Opportunities
Idea generation
Creates or adds value
Provides a sustainable competitive advantage
Marketable and financially viable
Idea low exit costs
Develop the opportunity
Access the necessary resources
The entrepreneur needs to decide whether the opportunity is something they can do or wants to do.
Whether a team is necessary depends upon certain conditions: Size and scope of the venture, and
personal competencies.
Advantages and Disadvantages of Sole Proprietorship
Ease and cost of stratup and end of business
Flexibility and control
Pride of ownership
Distribution and use of profit
No Special taxes
Profits are personal income and taxed at individual
tax rates
No government regulation
Unlimited Liability
Limited Financial Resources
Limited Skill Pool
Overwhelming Time Commitment
Few Fringe benefits
Limited growth and Lifespan
Partnership - A form of organization established when two or more individuals (partners) agree to
combine their financial, managerial and technical abilities for the purpose of operating a business for
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