Mie 201 Exam 2 Questions With Solutions 100% Solved
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Course
MIE 201
Institution
MIE 201
Mie 201 Exam 2 Questions With Solutions
100% Solved
Advantages of operating a Sole Proprietorship? simplicity (easy to establish and less
paperwork-only requirement is business licenses and permit)
single layer of taxation!!!
privacy (not required to report anything to anyone)
flexibility a...
finite life span (owners death may be the demise of the business)
what limits a sole proprietors ability to expand? resource limitation
Partnerships a company that is owned by two or more people but is not a corporation;
appropriate for firms that need more resources and leadership talent but do not need fundraising
capabilites
General partnership all partners have JOINT AUTHORITY to make decisions and JOINT
LIABILITY for the firms financial obligations
, Mie 201 Exam 2 Questions With Solutions
100% Solved
(if a partnership gets sued or goes bankrupt ALL the partners to dig into their own pockets to pay
the bills, like a sole proprietorship)
Limited partnership minimize personal liability exposure; one or more persons act as
GENERAL PARTNERS who run the business and have the same UNLIMITED liability as sole
proprietors ;
remaining owners are limited partners who do not participate in running the business & have
limited liability
Limited liability the max amount they are liable for is whatever amount each invested in
the business
master limited partnership (MLP) allowed to raise money by selling UNITS of ownership
to the general public, in the same way corporations sell shares of stock to the public--this gives
fundraising capabilities WITHOUT double taxation disadvantage
limited liability partnership (LLP) form of business was created to help protect individual
partners in certain professions from major mistakes by other partner in the firm; each partner has
UNLIMITED LIABILITY for the partnership as a whole
, Mie 201 Exam 2 Questions With Solutions
100% Solved
Advantages of Partnerships simplicity
single layer of taxation
more resources
cost sharing
broader skill and experience base
longevity (increase chances the organization will endure because new partners be drawn into the
business to replace those who die or retire)
disadvantages of partnerships unlimited liability (unless LLP)
potential for conflict (more bosses= more disagreement)
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