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Three Forms of Business Organizations-FINAN 450(#4)

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cmarquardt94's version from 2017-01-22 23:15

Section

Question Answer
Sole Proprietorship?single individual
what are some advantages of a [Sole Proprietorship]?easily formed, less regulations, individual taxation, no agency costs, total control
what are some disadvantages of a [Sole Proprietorship]?liability, accessing capital, endgame
Partnership?2 or more people, and has essentially the same advantages & disadvantages of Sole Proprietorship
Corporations?a legal entity, created by a state, which is separate and distinct from its owners and managers
What are some advantages of [Corporations] ?easy transfer of ownership, unlimited life, limited liability
What are some disadvantages of [Corporations] ?double taxation, time consuming creation, agency costs, transfer of control
The goal of a corporation is to...?maximize the wealth of its shareholders. This is NOT the same as maximizing profits
memorize