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Forms of Business Organization

Forms of Business Organization. Sole Proprietorship An unincorporated business owned by one individual Partnership An unincorporated business owned by two or more persons Corporation

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Forms of Business Organization

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  1. Forms of Business Organization • Sole Proprietorship An unincorporated business owned by one individual • Partnership An unincorporated business owned by two or more persons • Corporation A legal entity created by a state, separate and distinct from its owners and managers, having unlimited life, easy transferability of ownership, and limited liability

  2. Sole Proprietorship • Advantages: • Disadvantages:

  3. Partnership • Advantages: • Disadvantages:

  4. Corporation • Advantages: • Disadvantages: • Example:

  5. Hybrid Forms of Organization • Limited Partnership • A hybrid form of organization consisting of general partners, who have unlimited liability for the partnership’s debts, and limited partners whose liability is limited to the amount of their investment • Limited Liability Company (Partnership) • A hybrid form of organization in which all partners enjoy limited liability for the business’s debts, but the entity is not taxed as an entity • Professional Association (Corporation) • A type of corporation common among professionals that provides most of the benefits of incorporation but does not relieve the participants of malpractice liability

  6. Objective of the Firm • Primary Goals • Secondary Goals

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