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Name:________________________ Date:________________ Class:_______________________ Business Organizations Proprietorship, Partnership, & Corporation Sole proprietorship ______________________________ Business owned by one person. In this type of business, the owner is in charge of all day to day aspects of the business. Partnership: Two or more people operating a business as co-owners, partnerships usually create a legal agreement on splitting up the day to day aspects who share all profits. __________________________________________________________ of running a business __________________________________________________________________________________. owners but when the owners change, the company does not dissolve. The owners Corporation: Many ___________________________________________________________________ are also known as the shareholders. They then elect a board of people to make company policies, decisions, etc. ___________________________________________________________________________________ __________________________________________________________________________________. Sole Proprietorship Advantages: Get to work by yourself and don’t have to ask for anyone else's opinion. You keep all the profit _________________________________________________. The person can own the business for any duration of time and sell it whenever they want to. Income is taxed as personal income. _________________________________________________. discontinue You can _____________________ your business whenever you want. Disadvantages: Hard decisions all fall on you _________________________________________________. You are responsible for all debts and liabilities sustained by the business. Liability is being legally responsible for something ________________________________________________________________________. Can be hard to get high quality employees. Name:________________________ Date:________________ Class:_______________________ Partnership Advantages: two You have _________ people working instead of just one. Abilities and skills come from both sides _________________________________________________. Easy to establish. Make sure to have a legal agreement (see next slide). Easy to start up _________________________________________________. Have more than one person to lean on when it comes to making hard decisions or management. taxed the same as sole proprietor _________________________________________________. Legal Document With partnership, most people think everything will go smoothly at the beginning of starting up a business, however “break-ups”, buy outs, new so it is important to create a legal document partners, failed businesses, etc., do happen, _________________________________ that states guidelines on the following information. ___________________________________________________________________________________. “(1) each partner's rights and responsibilities, (2) the amount of capital each partner is investing in the business, (3) the distribution of profits, (4) what happens if a partner joins or leaves the business, and (5) how the assets are to be divided if the business is discontinued. Things have a way of changing and people forgetting over time, so it is essential that there be a signed document that all abide by.” http://economia.uniroma2.it/public/ba/files/Choosing_Your_Legal_Structure .pdf Disadvantages: You have to split the income _________________________________________________. There is a lot you need to figure out before beginning a partnership (see previous slide). Responsible for you and your partner’s debt. _________________________________________________. Corporation Advantages: Easier to start up the business when many owners and many different assets are brought in. Name:________________________ Date:________________ Class:_______________________ ____________________________________________________________________. _________________________________________________. Owners are not responsible for the business’s debts. Disadvantages: ________________________________________________________________________________. Many employees in a corporation means you have a lot of overhead to pay. ________________________________________________________________________________. Government keeps a very close eye on corporations. LLC Limited Liability Company- is a type of business ownership where there can be a single or multiple owners, like a partnership, but you have an option to be taxed like a corporation. ________________________________________________________________________________. This way the owners protect their ________________________________________ ________________________________________________________. Profit Business ______________________________________________________________. They have owners and shareholders in their business. Any profit that is made by the business goes to the _____________________ __________________________________. Non-Profit _____________________________________. Have no owners. ______________________________________________________. Usually for a good cause Name:________________________ Date:________________ Class:_______________________ Franchise Franchise is a business that was created for _____________________ an _____________________ business, but opening it in a ______________________, and where you are ____________________to sell goods and services a certain way. There is always a contract involved. The franchisee has to ___________the franchiser in order to open up the business. o The franchiser also gets to approve who opens their business in different locations. ___________________________________________________________________________________ __________________________________________________________________________________. Perks of a Franchise Consumers most likely already know about the original business so you don’t have to market as strongly to get customers. o ____________________________________________________________________________ ____________________________________________________________________________ Note: There is NO guarantee that the business will succeed. U.S. Small Business Administration o If you are ready to start up your own business, our country has a great _________________ with all the ______________________ you would need to get started. https://www.sba.gov/ o This site covers how to _______________________________________________________.