14502228
| Question | Answer |
| Individual/sole proprietorship: | This is primarily for individuals in the "doing business as (DBA)" category. The benefits of a sole proprietorship include relative freedom from regulation, though you are not exempt from investigation and prosecution of criminal or unlawful activity. You have full control of the entire company, and all profits go right to the owner or individual. The drawback is that the owner/individual has unlimited personal liability, meaning in layman's terms that if you get sued, the party bringing suit can go after all of your personal assets, including your house, car, and pets. |
| Partnership: | This is much like a sole proprietorship, except ownership is divided between two individuals. The disadvantages of sole proprietorship still remain; i.e., unlimited personal liability. In addition, control is divided. |
| Corporation | The main advantage to being a corporation is limited liability, meaning the company and the company alone is liable for anything that may happen, although this does not protect the owners from liability for criminal acts. Also, with a corporation, ownership can be transferred. Corporations have shares to divide up ownership. People who own shares, or stock, in the company are known as shareholders. The main drawbacks are potential restrictions by regulating agencies of the government and more tax implications. There are different types of corporations, such as a Class S and Class C, but we will not discuss these. |
| another type of business that exists? | government agency. These agencies are either elected and/or formed by elected individuals. Government agencies are run just like any other business when it comes to accounting, although specific rules may vary. |
Want to create your own Flashcards for free with GoConqr? Learn more.