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Groups will start teaching at

Groups will start teaching at . 2:20. Legal Forms of Ownership. Starting a Business?. Business Structure Depends On Personal Circumstances Financial Needs Type of Business Business Structure Affects Taxes Liability Ownership Control. Liability.

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Groups will start teaching at

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  1. Groups will start teaching at 2:20

  2. Legal Forms of Ownership

  3. Starting a Business? • Business Structure Depends On • Personal Circumstances • Financial Needs • Type of Business • Business Structure Affects • Taxes • Liability • Ownership Control

  4. Liability • Legally bound or obligated to pay or be responsible for • Disadvantage • A debt • Limited Liability- the amount of responsibility is set • Unlimited liability- amount of responsibility is not set

  5. Main Types • Sole Proprietorship • Partnership • Corporation Others: • S Corporation • Limited Liability Corporation

  6. Sole Proprietorship • ALL risks • All rewards • Unlimited Liability • Usually fewer than 50 employees • Over 70% of US Businesses are sole proprietorships • Little government intervention

  7. Partnerships • Business owned by two or more people • Combines each person’s capital, experience, abilities, and skills • Shares the risk of loss • Shares the chance for profit • General-each partner experiences unlimited liability • Limited-Liability is limited to the amount invested in the business

  8. Corporation • Functions independently of its owners • “…an artificial being, invisible, intangible, and existing only in contemplation of the law.” • Treated as a person in terms of • Legal rights • Duties • Powers

  9. Corporation • The corporation, NOT THE OWNERS, pays taxes, enters into contracts, and may be held liable for negligence. • The individual or group that owns the most shares maintains control of the company

  10. Corporate Shares 1 share =$1000

  11. Corporation Continued • Share of Stock-unit of ownership of the corporation • Board of Directors- group of people making decisions for a corporation • Dividends- distributions of a corporation’s profits to shareholders

  12. S Corporation • Small corporation • Taxed differently under Subchapter S of the Internal Revenue Code • Not taxed as a business • Individual shareholders are taxed on the profits they earn • Helps the owners during the early years when the business is most likely losing money

  13. S Corporation Example • Chandra earns $38,000 per year at her full time job • Also runs Forever Yours, wedding consultant business • Forever Yours Lost $12,000 first year • Because of Subchapter S and the S Corporation she set Forever Yours up as, she was able to reduce her taxable income for that year • $38,000-$12,000=taxable income of $26,000

  14. Limited Liability Company • LLC • Members have limited liability • Taxes are different from corporations • Benefits of partnership taxation • Limited personal liability • May be limited by state laws • Cannot be a single owner • Limited life in many states (30 years)

  15. Five Questions for your group are due • Please submit through the weblocker.

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