工商导论Chapter 1课件

• Their Owners’ Liabilities • The Life of the Entity • The Ability to Raise Capital • The Taxation
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Sole Proprietorship

Disadvantages Unlimited liability (the owner is personally responsible for all aspects of the business) Limited access to capital (lack of long period relation with banks and less security guarantee mean inability to raise large amounts of money Limited managerial expertise (one field expert does not mean expert in every aspect of business, i.e. marketing, finance, HR, operation etc) Life of the business is limited to the life of the proprietorship (the only way to transfer ownership of a sole proprietorship is to sell the entire business, otherwise, the life of the business ends when the sole proprietor dies)
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Partnership
Definition: An association of two or more people to carry on as co-owners of a business for profit. -- many professional businesses, such as accounting and legal firms are partnerships. Types of partnership:
Copyright © 2003Copyright by The McGraw-Hill © 2007 by Xiaoping Companies, Zhang. Inc. All rights reserved
McGraw Irwin/McGraw Hill/Irwin Hill Foreign Language College
McGraw Irwin/McGraw Hill/Irwin Hill Foreign Language College
Copyright © 2003Copyright by The McGraw-Hill © 2007 by Xiaoping Companies, Zhang. Inc. All rights reserved
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Forms of Business Organizations
Business can be organized as three types:
•
Sole Proprietorship
• Partnership • Corporation
Business Organization Differs in terms of :
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Partnership
Advantages Ease of organization—fairly easy to establish, not expensive and complicated. Improved access to capital and credit compared with sole proprietorship. Greater possibility for good management---a partnership allows two or more people to work together and bring different skills and resources to the business. Definite legal framework---a definite legal framework has developed for partnerships. Therefore, settling legal problems concerning partnerships is relatively simpler than solving problems of other forms of business. Better prospects for growth---increased capital and credit, better management and a more definite legal framework stands a better chance to survive possible setbacks and has better prospects to expand and grow.
Copyright © 2003Copyright by The McGraw-Hill © 2007 by Xiaoping Companies, Zhang. Inc. All rights reserved
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Sole Proprietorship
A business owned and controlled by one person. It is the simplest form of business organization to start and maintain. --- It is not a corporation. Small ventures can be owned and managed by a single individual such as restaurants, street grocery stores, florists, beauty saloons, drug stores etc. ---The business has no existence apart from you, the owner. Its liabilities are your personal liabilities. You undertake the risks of the business for all assets owned, whether used in the business or personally owned. You include the income and expenses of the business on your own tax return.
McGraw Irwin/McGraw Hill/Irwin Hill Foreign Language College
Copyright © 2003Copyright by The McGraw-Hill © 2007 by Xiaoping Companies, Zhang. Inc. All rights reserved
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Sole Proprietorship
Advantages
Subject to fewer government policy - Less tax burden (e.g. in the US the tax rates for sole proprietorship are often half those for corporations) - Exclusive use of profits (being your own boss means being the boss of your own money)
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Sole Proprietorship
Advantages
Ease of Organization - simple to establish (a small fee, a few minutes and procedure) - freer in decision making (compared with other business organizations, more freedom on management and operation) - easy to keep operational and financial secrecy (not necessarily report to shareholders or board)
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Partnerபைடு நூலகம்hip
Features: a. It can be created by an express agreement. b. The partners can be held responsible for the actions and business debts of the other partners. c. All the assets of the business are personally owned by the partners. d. Partners are not eligible for employment insurance if the business fails---partners are not paid a salary but they can take money from the business through personal drawings.
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