CJA1

privately owned or publicly held corporations. They may be unincorporated sole proprietorships owned by one person or partnerships between people or organizations, and the activities of the business are viewed as taxable personal income (McNamara, 2007). The sole proprietor is liable personally for all activities and operations of the business. For-pro�t businesses can also be organized as corporations (known as C corporations and S corpora‐ tions). A corporation is considered its own legal entity, separate from the individuals who own it or who formed the organization. Corporations can be for-pro�t or non‐ pro�t (government owned, for example) (McNamara, 2007). Corporations are usually formed to limit the liabil‐ ity the founders will face if there are poor operations or harmful activities and so that stock can be sold in the business. A board of directors is appointed to oversee the activities of corporations. Finally, for-pro�t organizations may organize as limited liability companies (LLCs). The LLC combines the advantages of the corporation with those of the sole proprietorship. The founders have mini‐ mum personal liability, unless a state or federal law is vi‐ olated; they can sell stock in the business; they can retain a voice in management decisions, goals, values, and ac‐ tivities; and they can share in pro�ts. This is a very popu‐ lar form of for-pro�t organization (McNamara, 2007).

For-pro�t businesses rely on a formal structure with a rigid hierarchy to accomplish their goals. A president or

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