Business Structures Business Structures I Business Organizations definition
Business Structures
Business Structures • I. Business Organizations (definition, example, strengths, weaknesses) • 1. Sole Proprietorships – Owned and managed by one person. Lawn mower business. Flexibility and no business tax. 100% liability and lack of capital
• 2. Partnerships – Two or more owners. Law Firm. More specialized decisions, no business tax, and easier capital. 100% liability and internal ownership arguments. • General Partnership – all equal • Limited Partnership – some limited in ownership and has limited liability.
• 3. Corporations – many owners, state and national approval required. Full legal status and no personal liability. Tax on all revenues and up for government regulations. • Terms: Fringe Benefits – health coverage and retirement plans. • Unlimited Liability – 100% responsible for debts. • Limited Liability – only responsible by foregoing investment. •
• Stock – sale of a portion of the corporation. • Common Stock – voting ownership based on shares. • Preferred Stock – non-voting ownership that gets dividends first. • Dividend – payment on profit of corporation. • Bond – loan by corporation to be paid back with interest. • Bankruptcy --closing corporation that ends all debt liability.
- Slides: 5