cost of creation

continuity or stability of organization

control of decisions

liability of owners

taxes

easiest and least expensive to create

-no formal documentation (only business license)

-no transfer of ownership

-total control by proprietor

-personally liable for all debts 

-all business income subject to taxation

-dissolved when one owner withdraws

-equal control over decisions between partners

-joint and several unlimited liability

-all business income subject to taxation

-apply for state charter with articles of incorporation

-lives as long as it conducts business

-managed by officers appointed by board of directors elected by shareholders

-shareholder's liable to their investment

-corporate income taxed

-shareholder's taxed only on income distributed

1 two or more persons

2. common interest in business

3. sharing profits and losses

-easy and inexpensive to form

-non tax-paying entity

-equal voice in management (unless otherwise noted)

-less regulation

-limited number of partners

-dissolves when one partner leaves

-unlimited liability

-taxed on share of profits (pay taxes on money they sometimes don't recieve)

3 kinds of Corporations 

(location)

1. domestic corporation: corp in the state its incorporated

2. foreign: corp outside state its incorporated

3. alien: foreign country

application for a charter

-specifies business name, period of duration, purpose, and number of shares

shareholders elect a board of directors

directs set objectives and goals and appoint officers

officers (president, secretary, treasurer) manage company to meet objectives

minority sues corporation on behalf of corporation

unfair actions by the majority

if corporate organization is misued--corporation is disregarded

shareholders treated as partners with unlimited liability

shareholder fails to treat the corporation as a seperate legal entity

corporate veil is peirced

holds officers to unlimited liability

Alli sues Dept of housing and urban development (HUD) for failure to pay housing assistance

HUD counterclaim: BSA Corp breached contract for unfair living conditions

Corporate Veil peirced:

BSA was instrument of Allis for personal use (loans and personal expenses)

-large number of investors

-control can be had with minority investment

-ownership divided into unequal shares

-limited personal liability

-perpetual existence

-shareholders may be employees

-significant creation costs

-must be qualified in all states

-more gov't regulation

-double taxation

partnership with a limited partner

-not personally responsible for debt of business

-can't be involved in control or management of business

general partner: partner that is liable

limited partnership agreement

-must be filed in every state of business

-corporation with legal benefits of partnership

-pay taxes on profits from shares not corporate income

-no more than 100 shareholders

-nontaxable entity

-combo of partnership and corporation

-file articles of organization

-owners called members