Sole Proprietorships. Sole Proprietorship is a business that is owned (and usually operated) by one person . Simplest form of ownership and easiest to start . Allows the owner to pick and choose what assignments to work on.
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Sole Proprietorship is a business that is owned(and usually operated) by one person.
A Partnership is a voluntary association of two or more persons to act as co-owners of a business for profit.
Usually represents a collection of people with special managerial skills and talents.
General Partner– a person who assumes full or shared responsibility for operating a business.
General Partnership - a business co-owned by two or more general partners who are liable for everything the business does.
Limited Partner– a person who contributes capital to a business but who has no management responsibility or liability for losses beyond his/her investment in the partnership.
Limited Partnership– a business co-owned by one or more general partners who manage the business and limited partners who invest in it.
Master Limited Partnership (MLP) – a business partnership owned and managed like a corporation but taxed like a partnership.
Articles of Partnership– a written or oral agreement listing and explaining the terms of the partnership.
Partnership Agreement should include:
Recommend that legal assistance be used to draft the agreement.
A Corporation is an artificial person created by law with most of the legal rights of a real person, including the rights to:
A corporation exists only on paper.
Corporations are owned by
Stockholders– people (sometimes called shareholders) who own a piece of the corporation in the form of
Stock – which is a share in the company in the form of a certificate.
Stock is sold to individuals or companies that want to invest in the newly formed corporation.
Closed Corporation is one whose stock is owned by relatively few people and is not sold to the general public.
If a stockholder wishes to sell his stock, a private sale will be arranged with another stockholder or a very close acquaintance.
Open Corporation is one whose stock is bought and sold on a Stock Exchange and can be purchased by individuals.
Stockholders may number in the hundreds of thousands or even millions.
Incorporation is the process of forming a corporation.
Common Stock Holders – individuals or firms who may vote on corporate matters but whose claims on profit and assets are second to claims of others.
Preferred Stock Holders – individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common-stock owners.
Dividend is a distribution of earnings to the stockholders of a corporation.
Other rights include: receiving information about the company, voting on changes to the corporate charter, and attending the Annual Stockholders’ meeting where they may vote on issues.
Proxy is a legal form listing issues to be voted on which allows stockholders to transfer their voting rights to someone else.
At this meeting, the incorporators and the original stockholders meet to elect the Board of Directors.
This Board is directly responsible to the stockholders for the way they operate the business.
Responsibilities include: setting company goals and developing plans (or strategies) to meet those goals.
Responsible for the overall operation of the company and for appointing the Corporate Officers.Board of Directors