Forms of Business Organizations

Forms ofBusiness Organizations

All by yourself?

Sole ProprietorshipOwned by one personOwner keeps all the profitsRelatively unlimited controlEasy to form

No separation of owner from businessOwner responsible for all debts/liabilitiesBusiness and personal property can be seized

How can I start one?

How can I start one? Few legal requirements Can be run from a home, garage, or van

Do you have a friend…

Do you have a friend…and a good idea?

PartnershipsOwned by two or more peopleShare profits equally(unless otherwise agreed upon)

PartnershipsOwners share all the risks equallyFully liable without limit(similar to a sole proprietorship)

Forming a PartnershipPartnership AgreementMore difficult than asole proprietorship

Corporations

CorporationsLegal entity/artificial personSeparate from its owners

CorporationsOwners risk losing their investmentsOwners do not lose personal assetsHarder to form

CorporationsState Charter and Organizational Fees

Let’sReview

Sole ProprietorshipRequirements for Organization None Legal Status Owner is the business Liability Unlimited Liability Management Owner decides Dissolution Owner decides/death Ease of formation Just do it Duration Death or disinterest

PartnershipRequirements for Organization Agreement of Parties Legal Status Owners not a separate entity Liability Unlimited Liability Management Owner have equal say Dissolution Owners decides/death/ withdrawal/Bankruptcy Ease of formation Moderately Hard Duration Withdrawal/Bankruptcy

CorporationsRequirements for Organization State Charter/Org. Fees Legal Status Separate entity from Owners Liability Limited liability of Shareholders Management Directors set policy and Appoint officers Dissolution Does necessarily end Ease of formation Difficult Duration Can be perpetual

Any Questions?

Any Questions? D. Casey Robertson mr.dc.robertson@gmail.com slideshare.net/Giratorio youtube.com/user/MrTeachingTech

Resources:http://www.paopen4businessbriefcase.state.pa.us/BStructure/SoleProp.asphttp://www.portal.state.pa.us/portal/server.pt/community/reources/8826/corporation/533420http://www.portal.state.pa.us/portal/server.pt/community/reources/8826/general_partnership/533421http://www.dos.state.pa.us/portal/server.pt/community/business-related_boards/13772http://www.allbusiness.com/business-planning/business-structures-corporations/686-1.htmlhttp://www.dos.state.pa.us/portal/server.pt/community/corporations/12457/forms/571880

Forms of Business Organizations

by D. Casey Robertson

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