BUSI 1800 Chapter 6: Forms of Business.docx
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Chapter 6: Forms of Business Ownership
•A sole proprietorship is a business that is owned and usually managed, by one
Ease of starting and ending the business
Being your own boss
Pride of ownership
Retention of company profit
No special taxes
Unlimited liability-the risk of personal loss: this is the responsibility of
business owners for all the debt of the business
Limited financial resources
Overwhelming time commitment
Few fringe benefits
Possibly pay higher taxes
•Is a legal form of business with two or more parties
•A general partnership is a partnership in which all owners share in operating the
business and in assuming liability for the business’ debts.
•A limited partnership is a partnership with one or more general partners and one
or more limited partners.
•General partner is an owner (partner) who has unlimited liability and is active in
managing the firm.
•Limited partner is an owner who invests money into the business but does not
have any management responsibility or liability for losses beyond the investment.
•Limited liability is the responsibility of a business’ owners for losses only up to
the amount they invest; limited partners and shareholders have limited liability.
•Limited liability partnership: a partnership that limit partner’s risk of losing their
personal assets to only their own acts and omissions and to the acts and
omissions of people under their supervision.
More financial resources
Shared management and pooled/complementary skills and knowledge
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