Untitled Flashcards Set

Flashcard 1: Sole Proprietorship

Pro – It’s easy and inexpensive to start, giving the owner full control of the business.

Con – The owner has unlimited personal liability and risks losing personal assets if the business fails.

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Flashcard 2: General Partnership

Pro – Partners can share resources, skills, and responsibilities with a simple setup.

Con – Each partner is personally liable for the business’s debts and the actions of the other partners.

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Flashcard 3: Limited Partnership (LP)

Pro – Limited partners can invest without being personally liable or involved in daily operations.

Con – General partners still carry full personal liability for debts and legal issues.

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Flashcard 4: Limited Liability Partnership (LLP)

Pro – All partners are protected from personal liability for the actions of other partners.

Con – LLPs are restricted to certain professions and require more legal formality than general partnerships.

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Flashcard 5: C Corporation

Pro – Owners have strong liability protection and the ability to raise capital through stock.

Con – It faces double taxation and has strict rules, reporting, and administrative requirements.

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Flashcard 6: S Corporation

Pro – It offers limited liability and avoids double taxation through pass-through income to shareholders.

Con – It has restrictions on ownership, including a 100-shareholder limit and U.S. residency requirements.

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Flashcard 7: Benefit Corporation (B Corp)

Pro – It allows a company to legally pursue social or environmental goals alongside profit.

Con – It requires detailed reporting and may face slower decision-making due to its dual mission.

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Flashcard 8: Limited Liability Company (LLC)

Pro – It offers flexible taxation and protects owners’ personal assets from business debts.

Con – Some states charge extra fees, and self-employment taxes may be higher than in corporations.

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Flashcard 9: Nonprofit

Pro – It is tax-exempt and can receive public and private funding for a charitable or social mission.

Con – It cannot distribute profits and must meet strict government reporting and compliance standards.

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Flashcard 10: Joint Venture

Pro – It lets businesses pool resources and expertise for a shared project or goal.

Con – It can lead to disagreements and unclear responsibilities between parties.