[AC 211] - Final Exam Guide - Everything you need to know! (33 pages long)
Document Summary
Sole proprietorship: business is owned (and usually operated) by one individual, all profits and losses are part of owner"s taxable income and owner is personally liable for all business debts. Partnership: similar to a sole proprietorship, except that profits, taxes, and legal liability are the responsibility of two or more owners instead of just one. Slightly more expensive to form because a lawyer is needed for agreement. Partnership typically has more resources available to it, which can fuel the business"s growth. Corporation: separate entity from both legal and accounting perspectives, legally responsible for its own taxes and debts (owners cannot lose more than their investment) Divide ownership into shares that can be sold to raise money. Most start out as private companies and apply to go public if they need financing. Ex. limited liability company (llc): combines characteristics of a partnership and a corporation.
