Student Resource 2 - Winston-Salem/Forsyth County Schools



Student Resource 2.7

Note-Taking Guide: Legal Forms of Business Ownership

Student Name:_______________________________________________________ Date:___________

Directions: Use this note-taking guide as a way to organize the information you learn from the presentation or the reading. While learning about each form of business ownership, fill in the blanks with the appropriate answers.

Sole Proprietor

o Typical size: _______________

o A sole proprietor is a _______________ conducting a business and not as an employee.

o The sole proprietor is the ___________ of a sole proprietorship.

o All business debts are the responsibility of _______________.

o The sole proprietor is responsible for _______________ actions taken in the name of the business.

o A sole proprietorship is the _______________ regulated of all business forms.

o A sole proprietorship can hire employees, but the owner _______________ be an employee.

o _______________ profits are taxed as regular income to the proprietor. The sole proprietorship itself pays _______________ taxes as a business entity.

o Typical examples of sole proprietorships include _______________, _______________, _______________, _______________, _______________, and _______________.

Partnership

• Typical size: _________________

• A partnership is _______________ people conducting a business and not as employees.

• _______________ business debts are the personal responsibility of the partners.

• _______________ are responsible for all actions taken in the name of the business by all other partners.

• A partnership is based on a document called the ______________________________.

• The partnership can hire employees, but _______________ be employees.

• _______________ profits are taxed as income to the partners. The partnership itself pays no taxes.

Corporation

• Typical size: ________________

• A corporation is _______________ people conducting a business and not as employees.

• Business debts are _______________ the personal responsibility of the owners (limited liability).

• The _______________ is responsible for all actions taken in the name of the business.

• The corporation is among the _______________ business forms.

• A corporation is a legal person in the eyes of the law and can _______________ property, make money, and be sued just like a(an) _______________.

• A corporation can hire employees, who _______________ include the owners.

• All profits are taxed _______________, once as _______________and again as _______________.

• A corporation is the only legal form that can issue ____________________ to raise capital.

Limited Liability Company

• Typical size: _____________________

• A limited liability company (LLC) involves _______________ people conducting a business and not as employees.

• All business debts are _______________ the personal responsibility of the owners (limited liability).

• The _______________ is responsible for all actions taken in the name of the business.

• An LLC is among the _______________ of business forms.

• An LLC is a legal person in the eyes of the law and can _______________ property, make money, and be sued just like a _______________ (and just like a corporation).

• An LLC can hire employees, who may _____ include the owners.

• An LLC may choose to be taxed as either a __________ or a ___________under IRS rules.

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