The owner receives all profits.

(a)  

There is unlimited liability if anything happens in the business. Your personal

assets are at risk.

(a)  

In a partnership, two or more people share ownership of a single business. Like

proprietorships, the law does not distinguish between the business and its owners.

The partners should have a legal agreement that establishes how decisions will be

made, how profits will be shared, how disputes will be resolved, how future partners

will be admitted to the partnership, how partners can be bought out or what steps will

be taken to dissolve the partnership when needed.

(a)  

 It is easy to establish (with the exception of developing a partnership

agreement).

 Separate legal status gives liability protection.

 Profits are taxed only once.

 Partners may have complementary skills.

(a)  

Partners are jointly and individually liable for other partners’ actions.

 Profits must be shared with the partners.

 Decision making is divided.

 Business can suffer if the detailed partnership agreement is not in place.

(a)  

A corporation is considered by law to be a unique entity, separate from those

who own it. A corporation can be taxed, sued and enter into contractual agreements.

The corporation has a life of its own and does not dissolve when ownership changes.

There are three types of corporations: C-corporation, S-corporation and Limited

Liability Company.

(a)  

A C-corporation is a corporation that is taxed separately from its owners. It gives

the owners limited liability, which can encourage more risk-taking and potential

investment.

(a)  

 It is limited liability.

 In regards to transfer of ownership, shareholders can sell their shares.

 Capital is easier to raise through the sale of stock.

 The company pays fringe benefits.

 There are tax benefits.

(a)  

 It is subject to double taxation. (Corporation and shareholder earnings are

taxed.)

 It can be costly to form.

 There are more administrative duties. This entity type is required by law to have

annual meetings, notify stockholders of the meeting and keep minutes of

meetings.

 C-corps pay corporate taxes at a different time than other forms of business.

(a)  

An S-corporation, also known as a subchapter S-corporation, offers the owners

limited liability. S-corporations do not pay income taxes; the earnings and profits are treated as distributions. The shareholders must report their income on individual income tax returns.

(a)  

 It enjoys limited liability.

 It avoids double taxation.

 Profits are taxed only once.

 Capital is easier to raise through the sale of stock.

 It offers transfer of ownership.

(a)  

 It can be costly to form.

 Stockholders are limited to individuals, estates or trustees.

 It is subject to required administrative duties.

 It cannot provide company paid fringe benefits.

 Stockholders are limited to citizens or resident aliens of the United States.

(a)  

A hybrid business structure that provides the limited legal liability of a corporation and the operational flexibility of a partnership or sole proprietorship. However, the formation is more complex and formal than that of a general partnership.

(a)  

 It is the most common business structure and is specifically created for small

businesses.

 This entity type requires insurance in case of a suit.

 It is a separate legal entity.

 LLCs are usually taxed as a sole proprietorship.

 LLCs can have an unlimited number of owners.

(a)  

 It can be costly to form.

 It requires yearly administrative costs.

 LLCs have a personal tax liability.

 Legal and accounting assistance is recommended for LLCs.

(a)  

Imports: a good or service brought into one country from another.

Exports: a good or service produced in one country then get marketed to other

country.

Import-export is the most fundamental and the largest international business

activity, and it is often the first choice when the businesses decide to expand

abroad as it is the easiest way to enter the market with a small outlay of capital.

(a)  

One of other ways to expand the business internationally.

It is the arrangement between a firm, called licensor, allows another one

to use its intellectual property such as brand name, copy right, patent, technology,

trademark and so on for a specific period of time. The licensor gets benefits in term

of the royalty. The company may choose to sell the products under this.

(a)  

This is closely related to licensing. It is a parent company gives right to another company to do business using the franchiser’s name and products in a prescribed manner. Franchising is different from the licensing in terms of the franchisees have to follow much stricter guidelines. Moreover, licensing is more about the manufacturers while franchising is more popular with restaurants, hotels, and rental services. For example, McDonald, KFC, Pizza Hut and so on.

(a)  

It is a positive aspect of the cooperation of

two or more companies in different countries are joined together for mutual gain.

(a)  

It is a company’s physical investment such as into

the building and facilities in the foreign country, and acts as a domestic business

with a full scale of activity.

(a)