What is your investment experience?

I do not currently have any type oI investment experience. I brieIly had a retirement account that
I rolled over into an IRA when my job ended. That was short lived as I took it out to help come
up with a down payment on my house. As I take college courses, I hope to gain a better
understanding oI this concept.

List the four major types of business organizations and the main characteristics,
advantages, and disadvantages of each form.

1. Sole proprietorship-a business owned by one person, usually containing a proprietor and
some employees.

Advantages:
It is the simplest business organization to start, the lone owner makes all decisions all retains all
proIit and is taxed only once Ior income.

Disadvantages:
Unlimited personal liability. Your name and the company`s name are legally as one. The
business collapses iI something happens to the owner.

2. Partnerships-a business that consists oI two or more owners bound legally to run a business.

Advantages:
Pooling resources Ior more capital, operates still without a Iormal business structure.

Disadvantages:
Still has unlimited liability, however this can be limited Irom aIIecting the innocent partners by
using a LLP, or LLC instead. Personal Iinances are still mixed with business Iinances. All the
partners are liable Ior debts and actions no matter which partner they came Irom.

3. Corporations-a legal entity authorized under a state charter

Advantages:
The risk to the individual is minimal, as the corporation is its own legal entity. TransIerability oI
the business between owners (shareholders iI it is public) is normal. The ability to amass large
amounts oI capital when being publicly traded is possible.

Disadvantages:
This Iorm pays separate corporate taxes in addition to the personal taxes paid by its
employees/managers. Organizational expenditures will be required to keep the company
appropriately organized and legal.

4. Hybrid Forms of Business Organization-businesses that combine the limited liability oI a
corporation and the tax advantages oI a partnership.

Advantages: Income to the partners is taxed as personal income and partners have limited
liability.

Disadvantages: Due to partners having limited liability, each partner`s conduct is less
scrutinized.