1. Describe the basic features that distinguish the four basic forms of business ownership: sole proprietorships, general partnerships, C corporations, and limited liability companies.
Ownership of C corporation is represented by shares of the stock, or shareholders, it is the most common type of the business, where ownership to the shareholders offers a limited liability to all its owners.
Limited liability companies are those companies who have the form of the partnership, in which all the partners have the right to participate in management and have the limited liability for company debts. A general partnership is a partnership (with 2 partners more often), where they enter into a voluntary partnership agreement. Basically there are such things as a financial contribution each partner will make, special responsibilities, the share of the profit/loss. The agreement can be oral, but the best way is to have everything on paper, in a written form.
And, finally, the sole proprietorship, are the businesses, that are owned and usually managed by an individual. To say in other words it s the extension of the owner. That means that if there is a profit in the company, it is defined as an owner’s profit, and if something goes wrong all the responsibility goes to the owner as well
2. Describe the relationship between a corporation’s common stockholders, its board of directors, and its chief executive officer (CEO).
The CEO is responsible for day to day operations and identifies and manages corporate risk., the board of directors oversees the management ( where CEO is related to), they also have particular functions, such as audit, compensation, corporate governance. The main responsibility of the board of directors is to decide in the interest of shareholders. Shareholders are people who voluntarily invest by buying stock. That is the reason why they can be defined as