Introduction to Sweet Opportunities
 Sole Proprietorship—a
business owned
exclusively by _____
____________. This one
person is in control of all
business aspects. The
government exercises
very little control over
sole proprietorships.
 Partnership—a business
owned by ____________
_______________. The
partners share in
decision-making,
responsibilities, profits,
and losses. Partnerships
face very little
government regulation.
 Corporation—treated
_________________ of
its owners. The
corporation, not the
owners, pays taxes,
enters into contracts,
and held liable for
negligence. Ownership is
in shares of stock.
 Liability
 ______________Options
 Tax Implications
 __________of the Business
 Can be an issue with sole proprietorships and
partnerships.
 ______________when a business experiences financial
difficulties or fails
 If a business is not fully insured, there is also the
possibility of loss due to disaster (e.g., fire, flood) or
lawsuits
 ___________________means that the owner’s personal
assets can be used to pay for any debts of the business
 For sole proprietorships and partnerships, the only
source of money is often ____________________.
 Corporations have more options when they need to
obtain additional financing.
 Corporations typically find it easier to borrow money –
through loans from the financial markets (commercial
banks, __________________, insurance companies).
 Tax law permits corporations to deduct the full cost of employee
_______________, such as medical insurance, thus reducing
corporate tax liabilities.
 Sole proprietorships and partnerships are not permitted to
deduct these costs directly from their business income (the costs
may be partially deductible as an adjustment to income)
 Sole proprietors and partners pay ______________________ on
their companies’ earnings.
 A corporation is taxed as a separate entity that pays tax on its
income.
 The stockholders also pay personal income tax on any dividends
they receive. The effect is referred to as “double taxation” and in this
case, it is the corporate owners that have a tax disadvantage.
 Sometimes _______________ can arise which result in
partnership and sole proprietorships being dissolved.
 For example: death or illness of a key person within a
sole proprietorship or partnership.
 Form groups of 4. Sit
with your group and then
wait for additional
information about the
sweet opportunities
activity.
 Using these notes and your Chapter 4 notes, make
recommendations as to what form of business
organization you think is best for EACH client.
 State the reasons for your position
 Identify at least one negative and suggest how you
might minimize it