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Real Estate Investment Chapter 9 Business Organizations © 2011 Cengage Learning
Key Terms Common stock Corporation Joint-stock company Joint venture Limited liability company Limited partnership Partnership Preferred stock S corporation Sole proprietorship Syndicate
© 2011 Cengage Learning Sole Proprietorship The simplest form of business organization is the sole proprietorship. No protection against financial losses or claims that may arise from the operation of the business. Potentially liable for the satisfaction of a judgment or lien.
© 2011 Cengage Learning Sole Proprietorship Income Tax Reports for a Sole Proprietorship. Accounting Method Used for a Sole Proprietorship. Disposition of a Sole Proprietorship Capital assets Depreciable property used in the business Real property used in the business Property held as inventory or stock in trade
© 2011 Cengage Learning Partnership Formation of a Partnership By Oral Agreement By Written Agreement Partnership Operations Liabilities
© 2011 Cengage Learning Partnership Disadvantages of a Partnership Unlimited liability Advantages of a Partnership Combines capital and expertise Partnership Income Tax Reports Guaranteed Payments
© 2011 Cengage Learning Distributive Items Ordinary income or loss Partner’s salary and interest Gains and losses from property used in trade or business, and from involuntary conversions. Qualifying dividends
© 2011 Cengage Learning Distributive Items Contributions Net self-employment income First-year asset expense option Expense account allowance Tax preference items
© 2011 Cengage Learning Limited Partnership The limited partnership puts a ceiling on the financial liability of each partner. Disadvantages of a Limited Partnership Advantages of a Limited Partnership Limited Partnership Income Tax Reports
© 2011 Cengage Learning Joint Venture A JV is distinguished by how the property is owned. Normally, each party in the venture holds an undivided share in the property.
© 2011 Cengage Learning Limited Liability Companies The LLC is a hybrid form of business ownership that incorporates the pass- through provisions of a partnership or Sub-S with the protections against liability of a corporation. As with any corporation or indirect ownership form, this corporate “veil” is not a guarantee against liability. Not a corporation
© 2011 Cengage Learning Limited Liability Companies Disadvantages of an LLC company’s bylaws need to address governance and liability issues, as well as such topics as the sale of member interests Generally more complex than a partnership. The LLC provides no special protection for the members from the debt of the LLC Income Taxation and Other Advantages of an LLC
© 2011 Cengage Learning Real Estate Investment Trusts Types of REITs Equity REIT Mortgage REIT Hybrid REIT Taxation and Regulation of REITs
© 2011 Cengage Learning Real Estate Syndicate A consortium of people or institutions that come together to share funding and/or expertise in a particular business endeavor that is often real estate investment or development. Regulations of a Real Estate Syndicate The sale of a participating interest in real property can be considered a sale of securities. Both federal and state laws control the sale of securities to the general public Require full disclosure of the facts by sellers of securities
© 2011 Cengage Learning Corporations The Corporate Entity The Corporate Structure Corporations for Profit Nonprofit Corporations Disadvantages of the Corporation Double taxation Advantages of the Corporation Corporate Income Tax Reports
© 2011 Cengage Learning S Corporations Like a hybrid between a corporation and a partnership A normally chartered corporation no more than 35 shareholders Taxed as a partnership The S corporation files an annual information return allocating its income among the shareholders. Advantages and disadvantages
X100©2008 KEAW L3 Business Forms Professor Kenneth EA Wendeln Sole Proprietorships and Partnerships Sole Proprietorships and Partnerships X100 Introduction.
Forms of Business.
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FORMS OF BUSINESS ORGANIZATION. Introduction and Understanding of Three Principal Forms of Business Organization Essential Attributes and Characteristics.
Forms of Business Ownership
Types of Business Ownership
A sole proprietorship is a business owned and operated by one individual Disadvantages: Sole proprietors have unlimited liability and are legally responsible.
The Main Idea Entrepreneurs need to understand the advantages and disadvantages of various types of businesses so that they can choose the one that best.
COPYRIGHT © 2011 BY JEFFREY PITTMAN Chapter 18 – Corporations.
Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE1 Forms of Business Ownership Goals Understand the three major forms of business ownership.
Chapter 33 Limited Liability Companies and Special Business Forms
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
9-1 Non-Corporate Forms of Business Sole Proprietorship Partnership LLC S corporation.
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Principles of Taxation Chapter 9 Sole Proprietorships, Partnerships, and S Corporations.
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Overview of Finance. Financial Management n The maintenance and creation of economic value or wealth.
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