Professional Documents
Culture Documents
Partnership
Corporations
Forms of Ownership
Comparison
Sole Proprietorships
Oldest and Most Common dated by to
colonial times
Owner and Managed by one individual with
minimum amount of help
$$$ capital used to start business comes from
the owners savings or getting a loan.
Advantages and
Disadvantages of Sole
Disadvantages
Proprietorships
Advantages
Ease of Starting
Control
Time Demands
Secrecy
Ease of dissolving
Partnerships
Two or more people own a partnership
They share everything
Can be based on a written, oral, or implied
agreement (legally)
Two types of partners
General partner has unlimited liability
Limited partner has limited liability
of Partnership.
Types of Partnerships
MLP (Master Limited Partnership)
Sells units traded on recognized stock exchange
Limited liability
Transferability of ownership
Pays no corporate taxes because the earnings are passed
Joint Venture
a partnership formed for a special purpose or project.
Articles of Partnership
(the
partnership
contract)
Name of the business partnership
Type of business
Locations of the business
Expected life of the partnership or re-evaluation
date.
Procedures for distributing profits and covering
losses
Responsibilities and duties of each partner
Procedures for withdrawal of funds
Procedures for dissolving a partnership
Time length of a partnership is determined by the
language in the Articles of partnership. Investments
are usually frozen at least 3 years.
Advantages and
Disadvantages of
Disadvantages
Partnerships
Advantages
More financial capital
Corporations
A corporation is a business that is a legal
corporations
A corporation is owned by
shareholders/stockholders.
Types of Corporations
Domestic Corporation a corporation that
Steps to Incorporation
1.
2.
3.
4.
5.
6.
7.
What is a proxy?
A proxy is a written statement signed by a
shareholder of a corporation allowing
someone else to cast his or her number of
votes.
V
Sissies Dairy
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c Pops Ice Cream
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Grannies
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Restaurant
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Sonnys Fruit
Orchard
Hickory Tree
Conglomerate Merger
Moms Apple Pie
Gramps
Restaurant
Horizontal Merger
Homerun Baseball
Company
Other types of
Corporations
S Corporation a corporation with 35 or fewer
owners that files an income tax return as a
partnership to take advantage of lower tax rates.
Cooperative (Co-op) an organization in which
people collectively own and operate a business in
order to compete with big competitors.
Professional Service Association: Professional People
(doctors, dentists, lawyers) joined together to form
an organization under professional association laws
treated as corporations for tax purposes. (profit
sharing, benefits, pension plans limited liability)
Advantages
Limited liability investors (shareholders) can
only loose what they have invested. They will not loose
any personal property if the company goes bankrupt.
Disadvantages
Startup difficulty and costs
Lack of control
Multiple taxation - same profits get taxes
twice.
Lack of secrecy
Lack of personal interest
Stability
Legal-entity status
Credit limitations
Franchising
Categories of Franchises
Franchise Trivia
What was the first franchise in US?
Singer Sewing Machine
Cocacola
What was the next to franchise in 1902?
Disadvantages
Guidance
Promoted brand name
Proven product
Financial Assistance
Franchise fees
External control
Overdependence
Poor local
reputation can
spread
An innovative Risk taker that is responsible for most of the economic growth in our
country. They often own their own business and/or create their own inventions.
Popular entrepreneurs include Henry Ford, Bill Gates, Jerry Greenfield, Ben Cohen,
and Donald Trump.
Other BusinessTerms:
Small Business
one that is independently owned and operated
and is no dominant in its field of operation.
A small business does not control a large
market share.
There are sales limits.
Maximum amount of employees 500
Minimum amount of employees 250
Maximum amount of sales.
Disadvantages
Some risks are out of the entrepreneurs control such