MGM101H5 Study Guide - Midterm Guide: Limited Liability, Bernard Madoff, Privately Held Company

• School: UTM
• Department: Management
• Course: MGM101H5
• Professor: Dave Swanston

Document Summary

Sole proprietorship business owned and operated by one person, without a corporation. Advantages: ease of starting/ending business, your own boss, no special tax, fewer regulations. Disadvantages: unlimited liability, limited financial resources, difficulty in management, limited growth. Partnership legal form of business with two or more parties. Advantages: more financial resources, longer survival, shared management. Disadvantages: unlimited liability, division of profits, disagreements. General partnership all owners share in operating business and liability. Limited partnership partnership with some general partners and some limited partners. General partner partner who has unlimited liability and manages firm. Limited partner partner invests money but doesn"t manage and isn"t liable for anything other than investment he made. Corporation: legal entity with authority to act and have liability separate from its owners. Advantages: more investment money, limited liability, size. Disadvantages: initial cost, paper work, stockholder and board conflict. Public corporation right to issue shares to public. Private corporation not allowed to issue stock; limited to 50 shareholders.