Exam (elaborations)
MGT 111- Exam 2 Chapters 5-8 Questions And Answers Latest Update
- Course
- MGT 111
- Institution
- University Of Illinois - Chicago
MGT 111- Exam 2 Chapters 5-8 Questions And Answers Latest Update
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Solution 2024/2025Pepper
MGT 111- Exam 2 Chapters 5-8 Questions And
Answers Latest Update
3 Types of Business Organizations
sole proprietorship, partnership, corporation
Sole Proprietorship
a business owned and managed by one person- 72% of US businesses, total
revenue 6%; small business
Positives of Sole Proprietorship
- easy to start, but also easy to end
- be your own boss
- pride in ownership
- get to keep the profits (don't have to share them)
- no special taxes
Negatives of Sole Proprietorship
- unlimited liability: risk all of your assets
- no benefits
- limited financial resources (money)
- limited management expertise
- time intensive
- limited life span
Partnership
- general partnership: a partnership in which all owners share in operating
the business and in assuming liability for the business's debt
- limited partnership: a partnership with one or more general partners and
one or more limited partners
- 8% of US businesses, total revenue 13%; both individual sole proprietors
Advantages of Partnerships
, Solution 2024/2025
Pepper
- More financial resources
- Shared management and pooled/complementary knowledge
- Longer survival
- No special taxes
Disadvantages of Partnerships
- Unlimited liability
- Division of profits
- Disagreements among partners
- Difficult of termination
Corporations
protect personal assets; 20% of US business; generate 81% of all revenues
Advantages of Corporations
- Limited liability
- Easy to sell shares
- Can grow large
- Perpetual life
- Easy to change ownership
- Ownership/management
Disadvantaged of Corporations
- Initial costs
- Extensive paperwork
- Double taxation
- Do business as the corporation
- Conflict
Types of Expansion
merger and acquisition
Merger
the result of two firms forming one company
Acquisitions
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