1 / 18

Understand the nature of business.

Understand the nature of business. 2.01 Understand the types of business ownership. Business Ownership. Sole Proprietorship Partnership Corporation Franchise Cooperative. Sole proprietorship. A business owned and run by one person The business is typically managed by the owner.

ishi
Download Presentation

Understand the nature of business.

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Understand the nature of business.

  2. 2.01 Understand the types of business ownership.

  3. Business Ownership • Sole Proprietorship • Partnership • Corporation • Franchise • Cooperative

  4. Sole proprietorship • A business owned and run by one person • The business is typically managed by the owner. • Formation varies by state.

  5. Advantages • Easy to start up • Complete control of the business • Owner receives all the profits • Limited taxes (one time taxation)

  6. Disadvantages • Limited capital (money) • Unlimited liability (responsible for ALL debt) • The business is limited to the lifetime of the owner

  7. Partnership • A business owned and controlled by two or more people who have entered a written agreement • The management of the company depends on the partnership agreement.

  8. Advantages • More capital and credit available than a sole proprietorship • Combined resources (money, expertise) • Shared management responsibilities • Shared risk • Work load easier to manage than a sole proprietorship

  9. Disadvantages • Profits are shared • Responsible for each others decisions • Potential for disagreement among partners • Unlimited liability (depending on type)

  10. Limited Liability Partnership • Identifies some investors who cannot lose more than the amount of their investment • Investors are not allowed to participate in the day-to-day business management

  11. Types of Partnerships • Dormant partner plays no role and is not known to the public. • General partner plays an active role and has unlimited liability (every partnership must have at least one general partner). • Limited participate as investors and have limited liability. • Secret partner plays an active role but is secret from society. • Silent partner does not have an active role but is known to the public.

  12. Types of Partnerships

  13. Cooperatives • Owned by members, serves their needs, and is managed in their interest • Purchase goods and services cheaper as a group than as individuals • Greater bargaining power against bigger business than as individuals

  14. Franchise • Permission to operate a business to sell products and services in a set way • Begins with a parent company who owns the product or service and grants the right to another business • Franchiser: the company that owns the product • Franchisee: the company purchasing the right to run the business • Why franchise? Brand/product recognition & a proven format that’s successful.

  15. Corporations • An organization owned by one or more shareholders and managed by a board of directors. • Ownership • Determined by purchase of stock • A stockholder, or shareholder, owns a ‘piece’ of the company • One share of common stock equals one vote

  16. Advantages • Easier to obtain capital • Limited liability for shareholders • Life of the corporation is unlimited • Can invest without having to manage day to day operations

  17. Disadvantages • Double taxation (profits and earnings) • Government regulations and legal restrictions • Decision-making shared among managers, board of directors, and shareholders instead of original owners • More difficult to form

  18. Specialized Corporations • Subchapter S (S-corporation) • treats partners as individuals by taxing them once • Limited Liability Company • Provides limited liability protection for owners • Nonprofit corporation • A group of people who join to do some activity that benefits the public

More Related