BUSED 101 Chapter Notes - Chapter 6: Independent Business, Franchise Disclosure Document, Limited Liability Partnership
7 Oct 2016
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Company earnings are treated as the owner"s income. Debts are considered the owner"s personal debt. Avoids possibility of double taxation of earnings. All responsibilities are placed on you personally. Limited ability to attract and maintain talented employees. If the owner dies, retires, or withdraws the company legally ceases to exist. Each partner has the right to participate in the company"s management and share in profits-- but also has unlimited liability for any debts the company incurs. Stronger financial base then a sole proprietorship. Ability to share responsibilities and capitalize on complementary skills. If someone drops out that could end the partnership. Establishes the existence of a new corporation. A corporation can enter binding contracts, borrow money, own property, pay taxes, and initiate legal actions in its own name. Owners are not personally responsible for the debts and obligations of. Ability to raise large amounts of financial capital. Ability to make use of specialized management.
