(1)Four basic forms of business organizations: Sole proprietorships (one owner) Partnerships (general and limited) Corporations Limited liability companies (LLCs) (2)The different characteristics of each business and their advantages/disadvantages: Advantages: Owned by one person (100%profit,easy to operate,make all decisions,more fast reactions to outside changes,flexible) Owner has unlimited liability for all debts incurred (what does that mean？) Tax efficient:add profits/deduct losses from business Very easy to create (usually) Disadvantages: Unlimited liability (all responsibilities) Difficult to raise capital Certain tax disadvantages (Fringe benefits:medical coverage, group insurance) Difficult to transfer the ownership Hard to scale Lack resources 2+owners. All owners have unlimited liability (unless they are limited partners) If someone is a limited partner what does that mean? It means if the business fails,they only lose what they invested. They are investors only (shareholder)and do not help operate the business. No double taxations Raise a greater amount of capital than sole trader (3)Limited liability and unlimited liability 2.基本概念和知识点 Sole proprietorships (one owner) Partnerships (general and limited) 3 3 (1) Four basic forms of business organizations: Sole proprietorships (one owner) Partnerships (general and limited) Corporations Limited liability companies (LLCs) (2) The different characteristics of each business and their advantages/disadvantages: Advantages: Owned by one person (100% profit, easy to operate, make all decisions, more fast reactions to outside changes, flexible) Owner has unlimited liability for all debts incurred (what does that mean?) Tax efficient: add profits/ deduct losses from business Very easy to create (usually) Disadvantages: Unlimited liability (all responsibilities) Difficult to raise capital Certain tax disadvantages (Fringe benefits: medical coverage, group insurance) Difficult to transfer the ownership Hard to scale Lack resources 2+ owners. All owners have unlimited liability (unless they are limited partners) If someone is a limited partner what does that mean? It means if the business fails, they only lose what they invested. They are investors only (shareholder) and do not help operate the business. No double taxations Raise a greater amount of capital than sole trader (3)Limited liability and unlimited liability 2．基本概念和知识点 Sole proprietorships (one owner) Partnerships (general and limited)