BMGT 110 Chapter Notes - Chapter 7: Limited Liability Partnership, Limited Liability Company, Sole Proprietorship

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 110
• Professor: Hugh Turner

Document Summary

That person provides the capital and deals with the liabilities/taxes. Pros: easy to form -- income taxes are only once. Cons: infinite liability -- only one source of capital could be limited. Makes up about 6% of sales but 72% of total businesses. Instead of one person, there are two or more partners that are owners. Pros: more capital because more people making money -- income is still only taxed once. Cons: all partners are responsible for liabilities -- capital is still limited to the partners -- owners of the company split up the capital/profit. Involves very large businesses (walmart, apple, exon) The way that shareholders get their profits are in the form of dividends. Access to an unlimited number of investors. Liability of owners is decreased because of the amount of people that have ownership. Could be a disconnect between the interests with the two. Private means that no random people can own stock.