MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
-sole propreitorship
-partnership
-corporation
1. 3 types of -businesses owned by one individual
busi- ness -the most common form of business organization in the United States
ownership
-easiest and least expensive form of business to start
-ex: tutoring/bookkeeping/landscaping etc...
2. sole proprietor-
ships -simplicity
-single layer of taxation - taxed at individual rates
-privacy
3. sole proprietor- -flexibility and control
ship
advantages -personal satisfaction
-fewer limitations on personal income
-complete ownership of the profits
-unlimited liability
-finite life span
4. sole proprietor-
ship disadvan- -resource limitations
tages -limited managerial experience
-demands on owner
-no employee benefits for the owner
-lack of qualified employees (can't match wage demands)
5. Many sole propri- services (like child care, salons, etc) rather than on the manufacture of
goods
1/
40
, MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
etors will
focus on
6. unlimited liability - means that the owner is personally and fully responsible for all
losses and debts of the business
-major drawback to a sole proprietorship or a partnership
-from a legal standpoint the owner and business are one and the same
2/
40
, MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
7. definition of an association of two or more persons to carry on, as co-owners, a
a
partnership business for profit; profits will be divided as specified in the
agreement
8. types of
partner- ships -general partnerships
-limited partnerships
-MLP
9. general
partner- ships -LLP
-partners are considered equal by law and all are liable for the business's
debts
10. limited
partner- ships -partners share ownership and both have unlimited
liability ex) lawyers, accountants, etc.
11. articles of -one or more persons act as general partners who run the business whil
part- nership the re-
maining partners are passive investors (not involved in managing the
business)
-called this because their liability (amount of money they can lose) is
limited to the amount of the capital they invested at the beginning of
12. MLP (master their partnership
lim- ited
partnership) -passive investors and have limited liability
legal documents that set forth the basic agreement between partners
-list the money or assets that each partner contributed
13.
-states each partner's individual management role/duty
-defines the steps a partner must take to sell his or her partnership
interest or what will happen if one of the patterns dies
-allowed to raise money by selling units of ownership to the general
public in the same way that corporations sell shares of stock to the
3/
40
, MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
public
-gives MLPs the
fundraising capabilities of
corporations without the
double-tax- ation
disadvantage
-mainly oil and gas companies
4/
40
(Makanui, NCSU).
-sole propreitorship
-partnership
-corporation
1. 3 types of -businesses owned by one individual
busi- ness -the most common form of business organization in the United States
ownership
-easiest and least expensive form of business to start
-ex: tutoring/bookkeeping/landscaping etc...
2. sole proprietor-
ships -simplicity
-single layer of taxation - taxed at individual rates
-privacy
3. sole proprietor- -flexibility and control
ship
advantages -personal satisfaction
-fewer limitations on personal income
-complete ownership of the profits
-unlimited liability
-finite life span
4. sole proprietor-
ship disadvan- -resource limitations
tages -limited managerial experience
-demands on owner
-no employee benefits for the owner
-lack of qualified employees (can't match wage demands)
5. Many sole propri- services (like child care, salons, etc) rather than on the manufacture of
goods
1/
40
, MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
etors will
focus on
6. unlimited liability - means that the owner is personally and fully responsible for all
losses and debts of the business
-major drawback to a sole proprietorship or a partnership
-from a legal standpoint the owner and business are one and the same
2/
40
, MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
7. definition of an association of two or more persons to carry on, as co-owners, a
a
partnership business for profit; profits will be divided as specified in the
agreement
8. types of
partner- ships -general partnerships
-limited partnerships
-MLP
9. general
partner- ships -LLP
-partners are considered equal by law and all are liable for the business's
debts
10. limited
partner- ships -partners share ownership and both have unlimited
liability ex) lawyers, accountants, etc.
11. articles of -one or more persons act as general partners who run the business whil
part- nership the re-
maining partners are passive investors (not involved in managing the
business)
-called this because their liability (amount of money they can lose) is
limited to the amount of the capital they invested at the beginning of
12. MLP (master their partnership
lim- ited
partnership) -passive investors and have limited liability
legal documents that set forth the basic agreement between partners
-list the money or assets that each partner contributed
13.
-states each partner's individual management role/duty
-defines the steps a partner must take to sell his or her partnership
interest or what will happen if one of the patterns dies
-allowed to raise money by selling units of ownership to the general
public in the same way that corporations sell shares of stock to the
3/
40
, MIE 201 Exam 2 Study Guide – Chapters 4, 5 & 8
(Makanui, NCSU).
public
-gives MLPs the
fundraising capabilities of
corporations without the
double-tax- ation
disadvantage
-mainly oil and gas companies
4/
40
