FM 116 Lecture Notes - Lecture 6: Double Taxation, Franchising, Sole Proprietorship

• School: FIT
• Department: Fashion Business Management
• Course: FM 116
• Professor: George Sanchez

Document Summary

Chapter 6: business formation choosing the for that fits. Sole proprietorship: single owner actively manages the company. Partnership: two or more people act as co-owners of a business for profit: general partnership: all partners actively manage business and have unlimited liability for any claims against firm. Advantages: ease of formation (minimal paperwork and costs, retention of control; independence; minimal government regulation, pride of ownership, retention of profits, taxed a personal income. Disadvantages: limited financial resources; banks not likely to offer loans, unlimited liability; no legal separation between company and you, limited ability to attract and maintain talent, heavy workload and responsibilities, lack of permanence. No limit to the number of partners. Verbal or written agreement details out: initial financial contributions, specific duties and responsibilities, how profit and losses will be shared, how disagreements will be settles, how a partner"s death or withdrawal will be dealt with. Capitalize on complementary skills: ease of formation, possible tax advantages.