Business Ownership

C Corporation

A legal entity subject to the laws of the state in which it is formed.

More complex to set up and manage, but limits liability of owners.

Enables expansion, growth of company ownership.

S Corporation

A tax classification (not a business entity)

100 shareholder maximum

Can apply to both C-Corp and LLC.

LLC

Limits Liability, but avoid "Double Tax"

Income/loss is passed through to owner's personal income tax.

Sole Proprietor

Form of business organization—a business that is established, owned, operated, and often financed by one person.

Partnership Business

An association of two or more individuals who agree to operate a business together for profit.

Types of Partnerships

General partnership

Limited partnership

Limited Liability Partnerships (LLP)

Franchising

A legal agreement that allows one business to be operated using the name and business procedures of another.

Board of Directors

Elected by stockholders to oversee corporation.

Stockholders(Shareholders)

Acquire stocks in exchange for ownership.

SBA

Principle U.S. Government agency concerned with helping small U.S. firms.

Business Incubator

Local organizations designed to provide low-cost shared business facilities, along with training, support, and networking, to small start-upventures.

Prototype Mfg

Can help inventors develop prototypes of their ideas or designs.

Acquisition

Procedure in which one firm purchases the property and assumes the obligations of another.

Mergers

Combination of two or more firms to form one company.

Horizontal Mergers

A merger of companies at the same stage in the same industry; done to reduce costs, expand product offerings, or reduce competition.

Vertical Mergers

A merger of companies at different stages in the same industry; done to gain control over supplies of resources or to gain access to different markets.

Conglomerate Mergers

A merger of companies in unrelated businesses; done to reduce risk.

General Partnership

A partnership in which all partners share in the management and profits. Each partner can act on behalf of the firm and has unlimited liability for all its business obligations.

Limited partnership

A partnership with one or more general partners, who have unlimited liability, and one or more limited partners, whose liability is limited to the amount of their investment in the company.

Corporation

A legal entity with an existence and life separate from its owners, who are not personally liable for the entity's debts. A corporation is chartered by the state in which it is formed and can own property, enter into contracts, sue and be sued, and engage in business operations under the terms of its charter.

Limited Liability Partnerships (LLP)

Similar to General Partnership except partners are not held responsible for the business debt and liability.