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Forms of Business Ownership

Forms of Business Ownership. MAM1010. Warm-up. Discuss the following scenarios with a partner: Rachel and Terry would like to open up a McDonald’s next month. Can they open up a McDonald’s without any problems?Why or why not?

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Forms of Business Ownership

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  1. Forms of Business Ownership MAM1010

  2. Warm-up • Discuss the following scenarios with a partner: • Rachel and Terry would like to open up a McDonald’s next month. Can they open up a McDonald’s without any problems?Why or why not? • JT and Rose are opening up their own coffee shop called “JR’s Coffee.”Can JT and Rose open up this coffee shop without any implications? Why or why not?

  3. Forms of Business Ownership • Sole Proprietorship • Partnership • Corporation • Franchise • Cooperative • Conglomerate • Multinational • Crown Corporations

  4. 1. Sole Proprietorship • A business owned and operated by one person. • Achieved by starting a new business or purchasing an existing business. • Examples? Definition from Thomson Nelson, (2003). Small business management: an entrepreneurial emphasis. Retrieved February 8, 2005, from http://www.longeneckersmallbusiness2e.nelson.com/.

  5. Information adapted from:Cranson, L & Dennis, M. (2001). Entrepreneurship: creating a venture. 2nd ed. Scarborough, ON: Nelson Thomson Learning.

  6. 2. Partnership • Two or more people who own and operate a business. • Achieved by starting a new business or purchasing an existing business. • Examples? Definition from Thomson Nelson, (2003). Small business management: an entrepreneurial emphasis. Retrieved February 8, 2005, from http://www.longeneckersmallbusiness2e.nelson.com/.

  7. Information adapted from:Cranson, L & Dennis, M. (2001). Entrepreneurship: creating a venture. 2nd ed. Scarborough, ON: Nelson Thomson Learning.

  8. 3.Corporation • A business organization that exists as a legal entity and provides limited liability to its owners. • Corporations are traded on the stock market. • Achieved by getting incorporated (must be approved by Corporations Canada) • Examples? Definition from Thomson Nelson, (2003). Small business management: an entrepreneurial emphasis. Retrieved February 8, 2005, from http://www.longeneckersmallbusiness2e.nelson.com/.

  9. Information adapted from:Cranson, L & Dennis, M. (2001). Entrepreneurship: creating a venture. 2nd ed. Scarborough, ON: Nelson Thomson Learning.

  10. 4. Franchise • Purchasing the rights and privileges to the name. If a person wants to open a franchise they must pay for the right to use the franchise name. • Achieved by purchasing the franchise name and rights. • Examples? Definition from Thomson Nelson, (2003). Small business management: an entrepreneurial emphasis. Retrieved February 8, 2005, from http://www.longeneckersmallbusiness2e.nelson.com/.

  11. Information adapted from Thomson Nelson, (2003). Small business management: an entrepreneurial emphasis. Retrieved February 8, 2005, from http://www.longeneckersmallbusiness2e.nelson.com/.

  12. 5. Cooperative • It is an enterprise, or business, owned by an association of persons seeking to satisfy common needs (access to products or services, sale of their products or services, employment, etc). • Achieved by adhering to the cooperative definition. • A non-profit business used to serve customers who must be members • Examples? Definition from Government of Alberta, (2005). The business link: business service centre. Retrieved February 8, 2005, from http://www.cbsc.org/alberta/tbl.cfm?fn=startup.

  13. Information adapted from Government of Alberta, (2005). The business link: business service centre. Retrieved February 8, 2005, from http://www.cbsc.org/alberta/tbl.cfm?fn=startup.

  14. 6. Conglomerate • A corporation consisting of several companies in different businesses. Such a structure allows for diversification of business risks, but the lack of focus can make managing the diverse businesses more difficult. • Multilevel marketing is required • Examples? Definition from ADVFRN, (2005). Advrn financial glossary: money words. Retrieved February 8, 2005, from http://www.advfn.com/money-words_term_1034_conglomerate.html.

  15. 7. Multinational • Another path to growth for many corporations has been expansion abroad. Many have moved production closer to markets by establishing foreign subsidiaries. The German auto manufacturer Volkswagen, for example, built a plant in Pennsylvania. Chrysler Corporation bought Rootes Motors in the United Kingdom and Simca in France. • Multilevel marketing is required • Examples? Definition from Encyclopedia Britannica Inc, (2005). Encyclopedia britannica online. Retrieved February 8, 2005, from http://www.britannica.com/ebi/article?tocId=199226.

  16. 8. Crown Corporation • A corporation that is established by a country's government. • Government operated • Examples? Definition from WebFinance Inc., (2005). Investor words. Retrieved February 8, 2005, from http://www.investorwords.com/1227/crown_corporation.html.

  17. Activity #1 • Individually, use www.google.ca or any other search engine or site you may know of and find an example of EACH form of business ownership: • Sole Proprietorship • Partnership • Corporation • Franchise • Cooperative • Conglomerate • Multinational • Crown Corporation

  18. Activity#1 continued… • In a word document, give a brief overview of what the business is about (approximately two-three sentences) and explain how the example corresponds to the form of business ownership. • Make sure to reference the URL’s used. • Save in your MAM 1010

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