BUS-X 100 Chapter Notes - Chapter 4: Decision-Making, General Partnership, Leveraged Buyout
Document Summary
Easy way for 2 induvls to conduct business. A legal entity w tax advantages for restricted no. of shareholders. Advantages: ease and cost of formation, secrecy, distribution and the use of products, flexibility and control of the business, free from government regulation, pays one income tax that includes the business and individual income, can be dissolved easily. Disadvantages: unlimited liability, limited source of funds, limited skills, lack of continuity, lack of qualified employees. Complete sharing of both the management and the liability: limited partnership: Has one partner take up unlimited liability while the other partner takes up limited liability. Advantages: ease of organization, availability of capital and credit, combined knowledge and skills, decision making, regulatory controls. Disadvantages: unlimited liability, business responsibility, life of the partnership. Partner dies partnership breaks company dissolves: distribution of profits conflicts may occur, limited source of funds. A legal entity created by the state assets and liabilities are separate from its owners.
