Untitled Flashcards Set

Sole Proprietorship

A business owned and run by one person, with no legal distinction between owner and business.

Pros of Sole Proprietorship

Simple to form, full control, minimal taxes.

Cons of Sole Proprietorship

Unlimited personal liability, harder to raise funds.

What should you study for a Sole Proprietorship?

Self-employment tax, registration laws, personal liability management.

General Partnership

A business where two or more people share ownership and responsibilities.

Pros of General Partnership

Shared resources and work, easy to start.

Cons of General Partnership

Joint liability, conflicts between partners.

What should you study for General Partnership?

Partnership agreements, conflict resolution, profit-sharing.

Limited Partnership (LP)

A business with general partners who run it and limited partners who invest.

Pros of Limited Partnership

Limited liability for passive investors.

Cons of Limited Partnership

General partners have full liability.

What to study for Limited Partnership?

Investment roles, liability laws, securities regulation.

Limited Liability Partnership (LLP)

A partnership where all partners have liability protection from each other's actions.

Pros of LLP

Limited liability for all, ideal for professionals.

Cons of LLP

Not available in all states, more complex to form.

What to study for LLP?

State laws, liability protections, professional ethics.

C Corporation

A separate legal entity owned by shareholders, can go public.

Pros of C Corporation

Limited liability, easy to raise funds, perpetual life.

Cons of C Corporation

Double taxation (corporate + personal dividends).

What to study for C Corporation?

Corporate finance, shareholder rights, SEC rules.

S Corporation

A corporation where profits/losses pass through to owners’ personal tax returns.

Pros of S Corporation

Avoids double taxation, offers limited liability.

Cons of S Corporation

Limited to 100 U.S. shareholders, more IRS rules.

What to study for S Corporation?

IRS rules, pass-through taxation, shareholder restrictions.

Benefit Corporation (B Corp)

A for-profit company that also pursues social/environmental goals.

Pros of B Corp

Mission-driven, legal protection for impact goals.

Cons of B Corp

More oversight, dual focus can complicate operations.

What to study for B Corp?

ESG strategies, B Lab certification, impact investing.

Limited Liability Company (LLC)

A hybrid business structure offering flexibility and liability protection.

Pros of LLC

Flexible taxation, limited liability, easy to manage.

Cons of LLC

Rules vary by state, possible self-employment taxes.

What to study for LLC?

Operating agreements, tax classifications, state laws.

Nonprofit Organization

A tax-exempt group created for social, charitable, or educational purposes.

Pros of Nonprofit

Tax-exempt status, access to grants/donations.

Cons of Nonprofit

Limited to mission-driven work, strict regulations.

What to study for Nonprofit?

501(c)(3) rules, grant writing, board responsibilities.

Joint Venture

A short-term collaboration between two or more parties for a specific project.

Pros of Joint Venture

Shared risk, combined expertise and resources.

Cons of Joint Venture

Potential conflicts, limited scope, legal complexity.

What to study for Joint Venture?

Contract law, strategic partnerships, global business models.