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5-1 Business in the U.S. Economy 5-2 Forms of Business Ownership

C H A P T E R. 5. BUSINESS ORGANIZATION. 5-1 Business in the U.S. Economy 5-2 Forms of Business Ownership 5-3 Organizational Structure for Businesses. Contingent worker- employee with no long term obligation (short term or temporary worker) PERCENT OF BUSINESSES BY EMPLOYEE SIZE.

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5-1 Business in the U.S. Economy 5-2 Forms of Business Ownership

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  1. C H A P T E R 5 BUSINESS ORGANIZATION 5-1 Business in the U.S. Economy 5-2 Forms of Business Ownership 5-3 Organizational Structure for Businesses

  2. Contingent worker- employee with no long term obligation (short term or temporary worker)PERCENT OF BUSINESSES BY EMPLOYEE SIZE

  3. BUSINESS ACTIVITIES • Generating ideas • Raising capital • Employing and training personnel • Buying goods and services • Marketing goods and services • Maintaining business records

  4. TYPES OF BUSINESSES • Producer- Create products and services Example: Extractor, Farmer, manufacturers • Intermediaries- Selling goods & services Example: Retail clothing store, COSTCO • Service business- Offer something intangible Example: Dentist, Teacher

  5. 3 TYPES OF BUSINESS OWNERSHIP • Sole Proprietorship- 1 owner Example: Duncan’s Landscape (small business) • Partnership- 2 or more owners Example: Law office of Smith & Williams • Corporation- A legal entity where the owners are shareholders (stock ownership) Example: Apple, Wal-Mart

  6. 3 TYPES OF BUSINESS OWNERSHIP Sole Proprietorship- Unlimited Liability- Owner is 100% responsible for the business Partnership- Partnership Agreement- Legal Document that defines the details of each partner Corporation- Articles of Incorporation- Legal documents that defines the details of the corporation. Stock- shares of ownership in a corporation Limited Liability- The risk is limited to your investment.

  7. Forms of Ownership

  8. Checkpoint  • Which form of business ownership is the most complex and difficult to form? • The corporation is more complex to begin than other business forms. • Forming a corporation requires much more bureaucracy, is more subject to government regulations, requires the organization of a board, and must have clearly defined bylaws.

  9. OTHER FORMS OF OWNERSHIP • Franchise- a chain business that you can purchase for a fee. Any 3 of the ownerships can invest in a franchise EXAMPLE: McDonalds, Sport Clips,

  10. Checkpoint  • What are the other specialized forms of business ownership? • Limited liability partnership • Joint venture • S corporation • Limited liability company (LLC) • Nonprofit corporation

  11. KEY TERMS • Mission Statement- a written objective of the company’s goals and vision • Goal- the objective, what are you wanting to accomplish • Policies- rules of the business • Procedures- methods of activities that support the mission statement and goals. • Organization chart- chain of command chart, who is in charge of who and what

  12. BUSINESS ORGANIZATION CHART

  13. (3 types of ownership, advantages/ disadvantages/legal documents)Sole ProprietorshipAdvantage- 100% profit, easy to startDisadvantage- 100% liability & risk, long hoursLegal Docs: Assumed Name Certificate, SS# or Tax IDPartnershipAdvantage- shared responsibility and riskDisadvantage- shared profitsLegal Docs: Partnership Agreement, Tax IDCorporation-Advantage – limited liability, more resourcesDisadvantage- double taxation, limited profitsLegal Docs: Corporate Resolution, Articles of Incorporation, Tax ID

  14. Page 2A & 2B (ONLINE RESEARCH)FRANCHISE RESEARCH (2)www.entrepreneur.com/franchiseCORPORATION RESEARCH

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