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MGM101H5 (376)
Chapter

nickels ch 6

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Department
Management
Course
MGM101H5
Professor
James Appleyard
Semester
Fall

Description
Lecture 4 Forms of Ownership Nickels Ch 6Friday September 17 20101241 AMSTARTING A SMALL BUSINESSKey to starting understanding how to get required resourcesThree major forms of businessSoleproprietorship1Partnership2Corporation3Soleproprietorshipbusiness owned and operated by one person without forming a corporationSingle entityPartnershipa legal form of business with two or more partiesCoownersCorporationa legal entity with authority to act and have liability separate from its ownersLiabilitybusiness responsibility to pay all normal debts and to pay because of a court order Because of lawfor performance under a contractpayment of damages to a person or property in an accidentAnother word for debtSOLEPROPRIETORSHIPSAdvantages of Sole ProprietorshipsEase of starting and ending the businessBuylease equipment and put up announcements saying you are in businessStop operating when you want to shut downBeing your own bossMistakesare your mistakesVictoriesare your victoriesPride of ownershipProud of managing and owning their own businessCredit taken for risks and providing needed productsRetention of company profitKeep all profitsNo special taxesAll profits taxed as personal income to ownersOwner pays personal income tax on that moneyClaim any business losses against other earned incomeDecrease personal taxes they would need to payLess regulationNot as monitored as corporations areAdministration is less costlyDisadvantages of Sole ProprietorshipsUnlimited liabilitythe risk of personal lossesUnlimited liabilityresponsibility of business owners for all the debts of the businessSelling your home your carLimited financial resourcesFunds provided by one personManagement difficultiesAll businesses need mgmInventory records accounting records tax records etcOften find it difficult to attract good skilled qualified employees to help run their business becauseMGM101 Page 1
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