forms of business organization
TRANSCRIPT
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Forms of
Business Organizations
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All by yourself?
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Sole Proprietorship
Owned by one person
Owner keeps all the profits
Relatively unlimited control
Easy to form
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No separation of owner from business
Owner responsible for all debts/liabilities
Business and personal property can be seized
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How can I start one?
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How can I start one?
Few legal requirements
Can be run from a home, garage, or van
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Do you have a friend…
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Do you have a friend…
and a good idea?
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Partnerships
Owned by two or more people
Share profits equally (unless otherwise agreed upon)
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Owners share all the risks equally
Fully liable without limit (similar to a sole proprietorship)
Partnerships
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Forming a
Partnership
Partnership Agreement
More difficult than a sole proprietorship
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Corporations
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Corporations Legal entity/artificial person
Separate from its owners
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Corporations Owners risk losing their investments
Owners do not lose personal assets
Harder to form
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Corporations State Charter and Organizational Fees
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Let’s
Review
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Sole Proprietorship Requirements for Organization
Legal Status
Liability
Management
Dissolution
Ease of formation
Duration
None Owner is the business Unlimited Liability Owner decides Owner decides/death Just do it Death or disinterest
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Requirements for Organization
Legal Status
Liability
Management
Dissolution
Ease of formation
Duration
Agreement of Parties Owners not a separate entity Unlimited Liability Owner have equal say Owners decides/death/ withdrawal/Bankruptcy Moderately Hard Withdrawal/Bankruptcy
Partnership
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Requirements for Organization
Legal Status
Liability
Management
Dissolution
Ease of formation
Duration
State Charter/Org. Fees Separate entity from Owners Limited liability of Shareholders Directors set policy and Appoint officers Does necessarily end Difficult Can be perpetual
Corporations
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Any Questions?
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Any Questions?
[email protected] slideshare.net/Giratorio
youtube.com/user/MrTeachingTech
D. Casey Robertson
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Resources: http://www.paopen4businessbriefcase.state.pa.us/BStructure/SoleProp.asp
http://www.portal.state.pa.us/portal/server.pt/community/reources/8826/corporation/533420
http://www.portal.state.pa.us/portal/server.pt/community/reources/8826/general_partnership/533421
http://www.dos.state.pa.us/portal/server.pt/community/business-related_boards/13772
http://www.allbusiness.com/business-planning/business-structures-corporations/686-1.html
http://www.dos.state.pa.us/portal/server.pt/community/corporations/12457/forms/571880