COPYRIGHTED MATERIAL
Other Types of Business Entities A partnership is a single business owned by two or more people. Partnerships differ from corporations in many important ways. First, a partnership does not have a board of directors . Also, partners can be held responsible for the debts of a partnership . A partnership does not issue shares, so it can’t sell shares to raise capital. Instead, it seeks capital contribution from individual partners. Partners share in the profits and assets of the business allocated in accordance with their partnership interest. A limited liability company (LLC) is a hybrid type of business structure. It is part corporation, part partnership . The main difference is in how it is taxed, the details of which are beyond the scope of this course. Understand, however, that LLC stands for limited liability company and that it is a popular business entity which provides protection from personal liability for the debts of the business, and functions much like a small corporation. A sole proprietorship is a popular simple business entity. As its name tells you, it is a business owned and operated by one individual , such as a person who runs a small bakery, or bike repair shop. A sole proprietorship can hire employees, buy and sell goods, and obtain loans in the name of the owner of the business. A sole proprietor is personally liable for the debts of the business . Corporate Meetings Periodically, boards of directors hold meetings where they approve or disapprove contracts and proposals presented by the company’s executives, and vote on other matters affecting shareholder value and the direction of the company. Some of the things a board of directors discusses and votes on are: • approving the business goals of the company • appointing a CEO and other officers • seeking financial resources , such as loans or venture capital SLIDE 12L PRODUCT PREVIEW • approving the company's annual budget • approving the corporation’s major contracts • setting salaries and other executive compensation • approving the sale or issuance of stock Corporate meetings are conducted in an organized and orderly manner addressing a preplanned and specific agenda called an Order of Business . Meetings are run in accordance with parliamentary procedure . Advise students that they will observe parliamentary procedure in action in this lesson and will practice parliamentary procedure by conducting a board meeting with their innovation team.
Lesson 12 | Business Blast 224
Made with FlippingBook flipbook maker