Forms of Business Ownership & Business Law Part I BCS-BE-16: The student evaluates sole proprietorships as a form of business. BCS-BE-17: The student evaluates.

Forms of Business Ownership & Business Law Part I

BCS-BE-16: The student evaluates sole proprietorships as a form of business.

BCS-BE-17: The student evaluates the different types of partnerships as a form of business.

BCS-BE-18: The student evaluates the different type of corporations as a form of business.

BCS-BE-19: The student chooses the most appropriate form of business ownership for any planned business.

BCS-BE-20: The student evaluates franchising as a form of business ownership.

Organizing a Business

The three main types of business organizations are:

______Proprietorships

_________ _________

U.S. Sole Proprietorships, Partnerships, and Corporations

Figure 6.1

Sole Proprietorships

sole proprietorshipa business ______ by one person

About three-quarters of all _____ in the United ______ are sole proprietorships.

Graphic Organizer

Advantages of Sole Proprietorships

Easy to ______Proprietors are

in _______

Proprietors ______all the profits

Taxes are ______than a corporation’s

Sole Proprietorships

unlimited liabilitywhen the owner is responsible for the company’s _____

A major _______of owning a sole proprietorship is that the _____ has unlimited liability.

Graphic Organizer

Disadvantages of Sole Proprietorships

Limited _______to creditMany run out

of _______

The owner may not have the necessary ________

The ________ endswhen the owner dies

Partnerships

partnershipa business owned by two or more ______ who share its risks and rewards

To start a partnership, you need a ________agreement.

Graphic Organizer

Advantages of Partnerships

Easy to _______

Easier to______capital

Easier toobtain ______

Not dependent on a sole ______

Only _______once

_______ in skills

Graphic Organizer

Disadvantages of Partnerships

Business risk is _______

Unlimited ______and

financial liability is shared

If one partner makes a mistake,

all ______ are responsible

Corporations

corporationa company that is registered by a ______ and operates apart from its owners

To form a corporation, the owners must get a _______ charter from the state where their main office will be located.

Corporations

limited liabilityholds a firm’s owners responsible for no more than the _______ that they have invested in it

Limited liability is a major ______ of a corporation.

Graphic Organizer

Advantages of Partnerships

Limited ______Ability to raise

______ byselling stock

Business doesnot end when an

______ dies

Graphic Organizer

Disadvantages of Partnerships

_______ taxationMore

______regulationDifficult and

______ to start

1. Income is taxed.2. Stockholders pay taxes

on profits issued to them

Other Ways to Organize a Business

Other ways to organize a business include:

___________________

Organization________

Other Ways to Organize a Business

cooperativean organization that is owned and _______ by its members

The purpose of a cooperative is to save ______ on the purchase of certain goods and ______.

Other Ways to Organize a Business

nonprofit organizationa type of business that focuses on providing a _______, not making a profit

A nonprofit organization does not pay ______ because it does not make a ______.

Other Ways to Organize a Business

franchisea contractual agreement to use the name and sell the ________ or services of a company in a designated geographic area

To run a franchise, you have to invest _______ and pay franchise fees or a share of the ______.