BUSMHR 2292 Lecture Notes - Lecture 3: Limited Liability, Sole Proprietorship, Takeover
20 Feb 2019
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A corporation: is a legal entity that"s separate from the parties who own it, the shareholders who invest by buying shares of stock. Corporations are governed by a board of directors, elected by the shareholders: advantages include: limited liability, easier access to financing, and unlimited life for the corporation, disadvantages include: the agency problem, double taxation, and incorporation expenses and regulations. A limited-liability company (llc): is similar to an s-corporation, but it has fewer rules and restrictions than an s-corporation. For example, an llc can have any number of members. A cooperative: is a business owned and controlled by those who use its services. Individuals and firms who belong to the cooperative join together to market products, purchase supplies, and provide services for its members. A not-for-profit corporation: is an organization formed to serve some public purpose rather than for financial gain. A merger: occurs when two companies combine to form a new company.
