businesses are-selectstarted as [

v

. However, based on the dollar value of sales, most business is done by 1. Businesses are frequently id then converted to ] when their growth results in disadvantages outweighing advantages.\ A proprietorship has three important advantages: (1) It is easily and inexpensively formed, (2) it is subject to ( than are However, a proprietorship also has three important limitations: (1) A proprietor has\ government regulations, and (3) it is subject to lower income taxes personal liability for the business' debts. (2) The life of the business is partnership avoids higher income taxes. A partnership has four important disadvantages: (1)-Select-

personal liability, (2) life, (3) difficulty of transferring ownership, and (4) difficulty of raising large amounts of capital.\ A corporation has the following advantages:\ (1)\ life, (2) ownership that is easily transferred through the exchange of stock, (3)\ | liability, and (4) can\ ] raise\ state and federal reports is complex. Large corporations are known as C corporations. However, as an aid to small businesses, Congress created

S

corporations.\ Limited liability company (LCS) and limited liability partnerships (LPs) have limited liability protection like but are taxed like [ have votes in proportion to their ownership interest. LLCs and LLPs have been gaining in popularity, but large companies still find it advantageous to be 1. Investors in an LLC or LLP advantages in raising capital for growth. corporations because of

The basic concepts of financial management are the same for all businesses, regardless of how they are organized. However, a firm's legal structure affects its operations. The main forms of business organizations are: (1) proprietorships, (2) partnerships, (3) corporations, and (4) limited liability companies (LLCs) and limited liability partnerships (L1Ps). In terms of numbers, most businesses al ]. However, based on the dollar value of sales, most business is done by . Businesses are frequently started as id then converted to [ when their growth results in disadvantages outweighing advantages. A proprietorship has three important advantages: (1) It is easily and inexpensively formed, (2) it is subject to than are . However, a proprietorship also has three important limitations: (1) A proprietor has government regulations, and (3) it is subject to lower income taxes limited to the life of the individual who created it. (3) A proprietorship has difficulty obtaining large sums thersonal liability for the business' debts. (2) The life of the business is A partnership has two important advantages: (1) It is easily and inexpensively formed and (2) its income is allocated on a pro rata basis to partners and taxed on a(n) partnership avoids higher income taxes. A partnership has four important disadvantages: (1) personal liability, (2) basis so the ownership, and (4) difficulty of raising large amounts of capital. life, (3) difficulty of transferring A corporation has the following advantages: (1) life, (2) ownership that is easily transferred through the exchange of stock, (3) liability, and (4) can raise large amounts of capital to operate large businesses. Its disadvantages are: (1) Corporate earnings may be subject to taxation and (2) setting up a corporation and filing required state and federal reports is complex. Large corporations are known as C corporations. However, as an aid to small businesses, Congress created S corporations. Limited liability company (LLCs) and limited liability partnerships (LIPs) have limited liability protection like but are taxed like - Investors in an LLC or LLP have votes in proportion to their ownership interest. LLCS and LLPs have been gaining in popularity, but large companies still find it advantageous to be advantages in raising capital for growth. corporations because of