1. Forms of Business Ownership

2. “C” Corporation Unlimited owners (shareholders) No personal liability for shareholders Taxed on earnings at corporate level Shareholders taxed on any dividends distributed Shareholders purchase stock Board of Directors – overall management, officers – day to day responsibility

3. “S” Corporation Up to 75 shareholders No personal liability Entity NOT taxed, shareholders taxed- called “pass through” taxation Shareholders purchase stock Board of Directors – overall management, officers – day to day responsibility

4. Sole Proprietorship One Owner Unlimited personal liability All taxation occurs through sole proprietor All funding comes from owner All management done by owner

5. General or Limited* Partnership Unlimited number of general partners Unlimited personal liability of all partners All taxation occurs through each partner All funding comes from partners All management done by partners ** If it’s a limited partnership, some partners do not equally share in management

6. LLC: Limited Liability Company Unlimited number of members allowed No personal liability Generally, entity not taxed as profit and loss is passed through to members Members contribute funds Management is determined by an agreement

7. Business Entity Activity Using your notes, complete the following: – List the pros and cons of each form of business ownership – Identify two examples of each form of business ownership (the internet is a beautiful thing!!!)