MGMT 1 Chapter Notes - Chapter 5: W. M. Keck Observatory, Snack, General Partnership
Document Summary
Sole proprietorship : business owned, managed by 1 person. Partnership : 2 or more people legally agree to become co-owners of business, Corporation : legal entity with authority to act and have liability apart from its owners, 20% Advantages of sole proprietorships: ease of starting & ending the business. Starting: buy/ lease needed equipment & put some announcements saying you are in business. Ending: just stop: being your own boss, pride of ownership. Deserve all credit for taking risks & providing goods/ services: leaving a legacy, retention of company profits, no special taxes. Taxed as personal income of owner, pays normal income tax on that money. Disadvantages of sole proprietorships: unlimited liability - the risk of personal losses. When work for others, it is their problem if business is not profitable. Unlimited liability : any debts, damages incurred by business your debts & you must pay them: limited financial resources.
