Organizing for Business
Organizing for Business MGMT1052
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This 3 page Class Notes was uploaded by John Mullowney on Monday February 29, 2016. The Class Notes belongs to MGMT1052 at University of Cincinnati taught by Catalin Macarie in Spring 2016. Since its upload, it has received 24 views. For similar materials see Essentials of Business in Business at University of Cincinnati.
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Date Created: 02/29/16
Organizing for Business Monday, February 15, 2016 12:15 PM -There is no single best form…it's your form -Answer to the following issues : - Potential growth - Stake and share - Need capital - Taxation - Responsibility - Legacy - Beneficiary and Risk - Complexity Forms of doing business in the US - DBA (Doing business as) sole proprietorship - Partnership (general or Liability) - Corporation (C Corp) Non-profit - S Corporation - LLC 1. Sole Proprietorship Advantages: Disadvantages: -Own manager -Expanding is hard -Own capital -no legacy -many "hats" 2. Partnerships Advantages: -knowledge and skill -Flexibility -Easy taxation -attract and add partners Disadvantages: -knowledge and skill -Flexibility -Easy taxation -attract and add partners Disadvantages: -Partner can leave -Split of the profits are the same -decision making is difficult -No continuity 3. C-Corp - Most common form - Stockholders - Run by a BOD - BOD officers - State Registration - Indicators Advantages - Low liability - Expand as much as possible - Sell shares - Never dissolves - Legacy - Skills Disadvanges: - Less profit - Operational cost - High compliance cost - Diminished Flexibility - Double Taxation 4. S-Corp - Number of share holders (100) - Simple taxation Advantages: - Skills - Financial Flexibility - Transferable ownership - Avoids income Tax and Double taxes Disadvantages: - Tax recognition on sales of assets - Limited capital Attraction - Restrictions on use and deference of loses 5. LLC Disadvantages: - Tax recognition on sales of assets - Limited capital Attraction - Restrictions on use and deference of loses 5. LLC - Most common organization for small or medium companies - Simple taxation - Based on an operating agreement - A great "Compromise" Advantages: - Simple business - Easier to operate than Corporations - No personal liability Disadvantages: - No shareholders (company not public) - State to state laws change - Ownership can't be tranfered
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