1 Basic Business Organization Basic Business Organization Have you watched the video? Have you watched the video? (YouTube – (YouTube – Basic Business Organizations) Basic Business Organizations) Have you read the text? Have you read the text? (Chapter 1 – (Chapter 1 – Contractor’s Business Reference Manual) Contractor’s Business Reference Manual)
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Jul 08, 2015
Describes 3 types of partnerships (general, limited, and limited liability companies) and S corporations as they relate to business.
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Basic Business OrganizationBasic Business Organization
Have you watched the video? Have you watched the video? (YouTube – (YouTube – Basic Business Organizations)Basic Business Organizations)
Have you read the text? Have you read the text? (Chapter 1 – (Chapter 1 – Contractor’s Business Reference Manual)Contractor’s Business Reference Manual)
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Review of the VideoReview of the Video
Sole ProprietorshipSole Proprietorship
PartnershipPartnership
CorporationCorporation
From Creative Commons – posted by Digg
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PartnershipPartnership
General PartnershipGeneral Partnership
Limited PartnershipLimited Partnership
Limited Liability CompanyLimited Liability Company
From www.InMagine.com
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General PartnershipGeneral Partnership
Greater financial resourcesGreater financial resources
Additional talents for the businessAdditional talents for the business
Shared responsibilitiesShared responsibilities
Profits taxes only onceProfits taxes only once
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General PartnershipGeneral Partnership
Each partner personally liable for Each partner personally liable for debtsdebts
Ends with the death or bankruptcy of Ends with the death or bankruptcy of anyany partner partner
No partnership interest can be No partnership interest can be transferred without the consent of alltransferred without the consent of all
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Limited PartnershipLimited Partnership One general partnerOne general partner
• Responsible for day to day operationsResponsible for day to day operations
• Makes all financial decisionsMakes all financial decisions
• Unlimited liability for debtsUnlimited liability for debts
Limited partnersLimited partners
• Invests money, property or bothInvests money, property or both
• Do not participate in day to day operationsDo not participate in day to day operations
• Limited liability (investment)Limited liability (investment)Image from www.InMagine.com
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Limited Liability CompanyLimited Liability Company
Best of both worldsBest of both worlds• Pass thru taxationPass thru taxation
• ““Corporate veil” protectionCorporate veil” protection
But there is a downsideBut there is a downside• More complicated to createMore complicated to create
• More record keeping requiredMore record keeping required
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Subchapter S CorporationSubchapter S Corporation Liability protection Liability protection
Pass thru taxationPass thru taxation
Limited to 75 shareholdersLimited to 75 shareholders
Limited fringe benefits for share-Limited fringe benefits for share-
holdersholders
Image from www.InMagine.com
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That’s all folks!That’s all folks!
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