Video Notes: Forms of Business Ownership - Flashcards

Flashcards covering key concepts from the video notes on forms of business ownership, including hybrids, partnerships, corporations, goals, mergers, sole proprietorships, and liability considerations.

Hybrid ownership (LLC/LLP) – Primary disadvantage

Higher complexity and ongoing regulatory costs (formation, filing, compliance) compared with basic forms like sole proprietorship.

Partnership

A business owned by two or more people who share profits, losses, and management; enables pooling of resources.

Corporation

A separate legal entity that can raise substantial capital, provides limited liability to owners, and involves more formalities and regulations.

Goals (first step in ownership selection)

Determining personal or business objectives before choosing a form of business ownership.

Merger

The combination of two companies into one entity, often to reduce competition and increase resources.

Sole Proprietorship

A business owned and operated by one person; offers full control but imposes unlimited personal liability.

Limited liability

Protection that limits an owner's personal liability for business debts (found in LLCs, LLPs, and corporations).

Limited liability company (LLC) / Limited liability partnership (LLP)

Hybrid ownership forms offering limited liability and often pass-through taxation, but with higher compliance costs than sole proprietorship.

Low-risk business structure

A form of ownership that minimizes personal risk, typically by providing limited liability (e.g., LLC, LLP, corporation).