The document discusses three common forms of business organization: sole proprietorships, partnerships, and corporations. It defines each form and provides advantages and disadvantages. A sole proprietorship is owned and managed by one individual who has unlimited liability. Partnerships involve two or more owners who share assets, liabilities, and profits under a partnership agreement. Corporations are separate legal entities where stockholders have limited liability and ownership can be transferred.

1. CHAPTER 5 1A) Explain what a sole proprietorship is? 1B) State & summarize the advantages. 1C) State & summarize the disadvantages. 2A) Explain what a partnership it. 2B) State & summarize the advantages. 2C) State & summarize the disadvantages. 3A) Explain what a corporation is. 3B) State & summarize the advantages. 3C) State & summarize the disadvantages.

2. SOLE PROPRIETORSHIP -”A BUSINESS OWNED & MANAGED BY ONE INDIVIDUAL.” -ACCOUNT FOR 72% OF ALL BUSINESSES IN THE US. -THE OWNER HAS “UNLIMITED PERSONAL LIABILITY.” -ALL PROFITS & DEBTS ACCRUE TO THE OWNER. BILL HERLICKA

3. ADVANTAGES/DISADVANTAGES ADVANTAGES: SIMPLE TO CREATE LEAST COSTLY FORM OF OWNERSHIP LEAST REGULATED FORM OF OWNERSHIP PROFIT INCENTIVE TOTAL DECISION-MAKING AUTHORITY EASY TO DISCONTINUE DISADVANTAGES: UNLIMITED PERSONAL LIABILITY LIMITED SKILLS & CAPABILITIES FEELINGS OF ISOLATION LIMITED ACCESS TO CAPITAL LACK OF CONTINUITY

4. PARTNERSHIP -”AN ASSOCIATION OF 2 OR MORE PEOPLE WHO CO-OWN A BUSINESS FOR THE PURPOSE OF MAKING A PROFIT.” -CO-OWNERS (PARTNERS) SHARE THE BUSINESS’S ASSETS, LIABILITIES, & PROFITS. -PARTNERSHIP AGREEMENT -”A DOCUMENT THAT STATES IN WRITING THE TERMS UNDER WHICH THE PARTNERS AGREE TO OPERATE THE PARTNERSHIP, & PROTECTS EACH PARTNER’S INTEREST IN THE BUSINESS. SAM & MARIAH CALAGIONE

5. ADVANTAGES/DISADVANTAGES ADVANTAGES: EASY TO ESTABLISH COMPLEMENTARY SKILLS DIVISION OF PROFITS LARGER POOL OF CAPITAL ABILITY TO ATTRACT LIMITED PARTNERS LITTLE GOVERNMENT REGULATION FLEXIBILITY TAXATION DISADVANTAGES: UNLIMITED LIABILITY OF AT LEAST ONE PARTNER CAPITAL ACCUMULATION DIFFICULTY IN DISPOSING OF PARTNERSHIP INTEREST LACK OF CONTINUITY POTENTIAL FOR PERSONALITY & AUTHORITY CONFLICTS PARTNERS ARE BOUND BY THE LAW OF AGENCY

6. CORPORATION -”A SEPARATE LEGAL ENTITY APART FROM ITS OWNERS WHICH RECEIVES THE RIGHT TO EXIST FROM THE STATE IN WHICH IT IS INCORPORATED.” -A GROUP OF INDIVIDUALS WORKING TOGETHER TO SERVE A VARIETY OF OBJECTIVES. -THE MAIN OBJECTIVE IS TO EARN LARGE, GROWING, SUSTAINED, LEGAL RETURNS ($$$) FOR THE PEOPLE WHO OWN THE BUSINESS.

7. ADVANTAGES/DISADVANTAGES ADVANTAGES: LIMITED LIABILITY OF STOCKHOLDERS ABAILITY TO ATTRACT CAPITAL ABILITY TO CONTINUE INDEFINITELY (PERPETUAL LIFETIME) TRANSFERABLE OWNERSHIP DISADVANTAGES: COST & TIME TO ESTABLISH & MAINTAIN DOUBLE TAXATION POTENTIAL FOR DIMINISHED MANAGERIAL INCENTIVES LEGAL REQUIREMENTS & REGULATORY RED TAPE POTENTIAL LOSS OF CONTROL BY THE FOUNDER(S)