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Cards In This Set
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Define "organizational forms"
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Ways businesses can be organized
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What are ways businesses can be organized called?
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Organizational forms
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What are the types of organizational forms? (3)
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1. sole proprietorship2. partnership3. corporation
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Which organizational form is owned and usually operated by one individual?
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Sole proprietorship
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How is a sole proprietorship owend & usually operated?
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By one individual
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What is the key advantage of a sole proprietorship?
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It is the easiest to start because it doesn't require any special legal maneuvers
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What is the key disadvantage of a sole proprietorship?
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Considered a part of the owner's life
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Which organizational form is the easiest to start and why?
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Sole proprietorship, because it doesn't require any special legal maneuvers
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What are the consequences of a sole proprietorship being considered a part of the owner's life? (2)
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1. all profits or losses become part of the owner's taxable income2. owner personally responsible for all debts of the business
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Which organizational form's profits, taxes, & legal liability are the responsibility of 2 or more owners?
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Partnership
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How is a partnership run?
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Profits, taxes, & legal liability are the responsibility of two or more owners
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What is the key advantage of a partnership?
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Typically has more resources available to it which can fuel the business's growth
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Which organizational form typically has more resources available to it, which can fuel the businesses growth?
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Partnership
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What is the key disadvantage of a partnership?
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Lawyer needed for a partnership agreement, more expensive
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Which organizational form is more expensive and why?
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Partnership; b/c lawyer is needed for a partnership agreement
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