| A | B |
|---|
| sole proprietorship | a business structure in the U.S. whereby the owned by one person/family |
| What % of businesses in the U.S. are sole proprietorships? | 73% |
| Advantages of a sole proprietorship. | (1) Owner makes all decisions (2) Owner keeps all profits (3) Income tax is lower than a corporation |
| Disadvantages of a sole proprietorship | (1) Unlimited liability (2) May be hard to get credit (3) Owner may not have all the skills needed (4) Ends when the owner dies |
| What does LLC stand for? | Limited Liability Company |
| LLC | a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities |
| partnership | a business structure in the U.S. where the business is owned by two or more people--the owners share risks and rewards |
| partnership agreement | an important document which outlines rights and responsibilities of each partner |
| corporation | a business structure in the U.S. that (1) Registered by the state it will operate in (2) Operates separately from owners (3) Formed by a corporate charter (license) (3) Can sell stock (4) Must have a board of directors |
| Advantages of a corporation | (1) Limited liability (2) Can raise money easily (3) Doesn’t end when an owner dies |
| Disadvantages of a corporation | (1) Double taxation--(a) Pay taxes on income (b) Stockholders pay taxes on profits--some exceptions (2) Regulated closely by government (3) Can be difficult/costly to start |
| franchise | A business structure in the U.S. he owner licenses its operations—along with its products, branding, and knowledge—in exchange for a fee. |
| cooperative | A business structure that is an association of people (organization) that is owned and controlled by the people to meet common needs |
| nonprofit | A business that is organized to help people--to do good--it doesn't seek to make a profit. It must register with the government and doesn't pay taxes a profit |
| unlimited liability | When the partners and sole proprietors of a business are responsible for all debt and liabilities incurred by the business |
