国际商法 公司法Unit+1+different+organizations.ppt

Unit 1 Introduction to different forms of business entities 1 sole proprietorships 2 partnerships General Partnership, Limited Partnership, LLC (Limited Liability Company) 3 corporations Sole proprietorship 1. definition A person doing business for himself or herself is a sole proprietor; the business organization is a sole proprietorship. The sole proprietorship is the oldest and simplest form of business organization. As a proprietor, a person may simply begin to do business without formality in enterprises that do not require a government license or permit. The proprietor generally owns all or most of the business property and is responsible for the control, liabilities, and management of the business. In a sole proprietorship, legally and practically the owner runs the business, and capital must come from the owner’s own resources or from borrowed resources. The greatest disadvantage of the sole proprietorship is the limited alternatives for raising capital and the proprietor usually bears unlimited responsibility to the enterprise’s debt. 2. characteristics a. sole proprietorship is set up by one person; b. the assets of proprietorship belongs to the investor; c. the investor bears unlimited liability to the proprietorship’s liability; d. the proprietorship is not a legal person. 3. merits a. it does not need large amount of capital; b. it enjoys tax benefit; c. it’s easy to organize and inexpensive to operate 4. demerits a. it’s very difficult to raise capital; b. the investor bears unlimited liability; c. the business scale is small. Partnerships 1. definition A partnership is defined as an association of two or more persons to carry on a business as co-owners for a profit. The partners or general partners share control over the business’s operations and profits. Many attorneys, doctors, accountants, and retail stores are organized as general p