Business Entities

Learning Objectives

After studying this module, you should be able to:

Identify and describe the factors an entrepreneur should consider in deciding the appropriate business entity to select in starting a business
Compare and contrast the formation, duration, management and control, liability, and taxation of sole proprietorships, general partnerships, limited partnerships, C-Corporations, S-Corporations, close corporations, and limited liability companies.
Explain the advantages and disadvantages of each form of business entity.
Describe the limited liability shield afforded to limited partners, members of an LLC, and shareholders of a corporation and when it may be possible to pierce that shield to hold limited partners, LLC members and controlling shareholders personally liable.
List the major characteristics of a corporation.
Explain the role of officers, directors and shareholders in the management of a corporation, as well as the rights, duties and potential liabilities of each.
Understand the directors’ fiduciary duties to shareholders and the limits of the “business judgment rule.”