Podcast
Questions and Answers
What is a characteristic of a sole proprietorship?
In a partnership, what type of partner has limited liability?
What is the bid price in a transaction?
What is a characteristic of a corporation?
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What is the bid-ask spread?
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What is the primary risk associated with being a sole proprietor?
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What type of partnership does not have general partners?
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What is the main advantage of a corporation over a sole proprietorship?
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What is the difference between the bid price and the ask price?
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Why do corporations issue shares?
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Study Notes
Business Structures
- A sole proprietorship is owned and run by one person, typically with few employees, and carries unlimited personal liability.
- In a partnership, there are multiple owners, with two types of partners: general partners who are personally liable for debt, and limited partners who have limited liability.
Limited Liability
- A limited liability partnership has no general partners, and the limited partners run the business.
Corporation
- A corporation is a legal entity separate from its owners, responsible for its own obligations.
- Corporations allow for free trade in shares and can raise capital by selling ownership.
- However, corporations are subject to double taxation.
Trading Terms
- The bid price is the highest price a customer is willing to pay to buy a security.
- The ask price is the lowest price a seller is willing to accept to sell a security.
- The bid-ask spread represents the transaction costs.
Business Structures
- A sole proprietorship is owned and run by one person, typically with few employees, and carries unlimited personal liability.
- In a partnership, there are multiple owners, with two types of partners: general partners who are personally liable for debt, and limited partners who have limited liability.
Limited Liability
- A limited liability partnership has no general partners, and the limited partners run the business.
Corporation
- A corporation is a legal entity separate from its owners, responsible for its own obligations.
- Corporations allow for free trade in shares and can raise capital by selling ownership.
- However, corporations are subject to double taxation.
Trading Terms
- The bid price is the highest price a customer is willing to pay to buy a security.
- The ask price is the lowest price a seller is willing to accept to sell a security.
- The bid-ask spread represents the transaction costs.
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Description
Learn about the different types of business structures, including sole proprietorship, partnership, limited liability partnership, and corporation, and their characteristics.
