Chapter 37 - Introduction to forms of business and formation of partnerships. In this chapter you will: Choose an appropriate form of business for a particular enterprise and list characteristics of each form; describe creation and risks of being a partner or purported partner; identify partnership capital, property, and interests. | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 9 Introduction to Forms of Business and Formation of Partnerships Operation of Partnerships and Related Forms Partners’ Dissociation and Partnerships’ Dissolution and Winding Up Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships Partnerships P A R T Introduction to Forms of Business and Formation of Partnerships P A E T R H C 37 I wanted to be an editor or a journalist. I wasn't really interested in being an entrepreneur, but I soon found I had to become an entrepreneur in order to keep my magazine going. Sir Richard Branson, Entrepreneur Learning Objectives Choose an appropriate form of business for a particular enterprise and list characteristics of each form Describe creation and risks of being a partner or purported partner Identify partnership capital, property, and interests Sole proprietorship Partnership General, limited, limited liability, | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 9 Introduction to Forms of Business and Formation of Partnerships Operation of Partnerships and Related Forms Partners’ Dissociation and Partnerships’ Dissolution and Winding Up Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships Partnerships P A R T Introduction to Forms of Business and Formation of Partnerships P A E T R H C 37 I wanted to be an editor or a journalist. I wasn't really interested in being an entrepreneur, but I soon found I had to become an entrepreneur in order to keep my magazine going. Sir Richard Branson, Entrepreneur Learning Objectives Choose an appropriate form of business for a particular enterprise and list characteristics of each form Describe creation and risks of being a partner or purported partner Identify partnership capital, property, and interests Sole proprietorship Partnership General, limited, limited liability, or limited liability limited partnership Corporation Regular “C”, Subchapter “S”, nonprofit, professional Limited liability company Including professional form Basic Forms A sole proprietorship has only one owner and is an extension of its owner It is not a legal entity and cannot sue or be sued, so creditors/claimants sue the owner Advantages: no formalities, taxes flow to owner, owner takes all profit and control Disadvantage: owner bears all risk of loss Sole Proprietorship A partnership has two or more owners or partners and takes several forms: general, limited (LP), limited liability (LLP), limited liability limited (LLLP), or professional A partnership is a legal entity but not a federal tax-paying entity; thus all income or loss must be reported on an individual partner’s federal income tax return whether or not distributed or allocated to the partners Partnership Advantages: relatively easy to create, has a legal entity but individual taxation, partners control the
