Forms of Business Organization (for profit)

(1) Sole proprietorship 

1.  person: Owner
2.  No formal legal structure
3.  Personally liable (responsible) for devts of business
4.  When owner dies, business ends.

 

(2) Partnership

1.  2 or more people
2.  personal liablilty
3.  no formal legal structure
     informal - state law provides terms
     formal = legal agarement = partnership agarement
4.  When 1 partner dies, end of partnership

 

(3) Corporation (Pubilc, Private)

1.  Spearate legal entity = artificial person
                     └ Can sue/ be sued
                        Can own property
                        Can enter into contracts
                        Can commit crimes
2.  Always formal structure: state law
3.  Managers: Directors
     Shareholders: Owners
4.  No personal liability

 

to be continue.......

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