MEM 2221 Lecture Notes - Lecture 15: Limited Liability Company, Limited Liability, Sole Proprietorship
11 Dec 2019
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Organization - group of people who work together toward a common goal. Sole proprietorship - business owned and operated by one person. Profit is taxed once (on schedule c on owner"s income tax form) Duration of business is limited to life of owner. Partnership - association of 2+ partners to co-own a business for profit. Partnership pools managerial skills and judgments, divided decision making. Profit is taxed once on owner"s income tax. Limited partnership - 1+ general partner with unlimited liability and rest are limited partners who are only liable to the extent of their investment of the venture. Limited liability company (llc) - owners (members) have limited personal liability. No restriction on number of members (1+) Corporations - legal entities owned by shareholders. Shareholders generally do not have liability beyond loss of value in their stock. Perpetual life (as long as they submit an annual report to the state) Easer to raise money, transfer ownership, change management.
