Legal Structures - Activity Fill in the blanks There are various legal structures to choose from when creating a business. An S corporation and C corporation have specific tax advantages and limited liability. They have shareholders, a lower tax rate, and follow strict qualifications to create. A limited liability company (LLC) has a personal tax rate. They are not personally liable for the company’s debt. A sole proprietorship or partnership is responsible for all debt and they are easy to create. The last legal structure, nonprofit organizations, have specific tax exemptions. Match the following characteristics to the appropriate legal structure. S corporation, Sole proprietorship, Partnership, LLC, Non-profit, C corporation a. No ownership, no US federal taxes Non-profit b. Best for international business even with being double-taxed C corporation C. Easy to create but comes with unlimited liability Sole proprietorship d. Lower tax rate that prevents the company from being double-taxed LLC e. Ideal for a single owner seeking low risk S corporation f. Shared financial backing Partnership Business Life Cycle Fill in the blanks Business Life Cycle Stages There are seven stages in a business life cycle. Each stage represents a different phase of growth and expansion for a business. The first stage is existence, when a business begins. After this initial period is the survival stage. In this stage, income and customers begin to grow. Once a business is economically healthy, it moves to the success stage. In the take-off stage, an owner decides whether to continue growing the business or to sell the business. During the resource maturity stage, the owner can separate financially and operationally from a business. Pivot or persist is next as an owner decides if they will continue to grow the business into a large company or pivot to a new project. Finally, an owner may choose to sell their company in the exit plan stage. 1. List the correct order of the business life cycle stages: a Existence Stage b Survival Stage c Success Stage d Take-off Stage e Maturity Stage f Pivot or persist Stage g Exit Stage 2. Michael owns a small but profitable tech company. He has been approached by a larger company that wants to purchase his business. In which business life cycle stage is Michael? Take-off Stage 3. Bill just started a new graphic design business. He is advertising online and trying to gain customers. He just finished working with his first client. In which business life cycle stage is Bill? Existence Stage 4. Stephanie started a new flower shop last year. She has a good customer base and money coming in. In which business life cycle stage is Stephanie? Survival Stage

Legal Structures - Activity - Business Life Cycle

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