Business and laborTypes of Businesses

Chapter 19Section 1

Types of BusinessesProprietorships

Sole Proprietorship- A business owned and operated by a sole or single person.

Advantage- Full pride in the owning the business receives all profits.

Disadvantage- Unlimited liability/ Full responsibility

Also difficult to raise financial capital (money needed to run a business or enable it to grow larger)

Types of BusinessesPartnerships

Partnership- A business that two or more people own and operate.

Structure. Articles of Partnership- The document identifies how much money each of you will contribute and what role partner will play in business.

Advantage- Pride in ownership, ability to borrow, diverse talents, and efficient operations.

Disadvantage- Legal structure is complicated and unlimited liability.

Types of Businesses Corporations

Corporation- an organized business recognized by law that has many rights and responsibilities of the individual.

Structure. Charter- A government document granting permission to organize.

- The Charter also specifies the amount stock, or ownership shares of the corporation that will be issued.

Types of BusinessesCorporations Continued

- The people who buy this stock- the stockholders- become part owners of the corporation.

- The stockholders elect a board of directors to act on their behalf.

- Advantage- Ease in raising financial capital and growth

- Disadvantage- Expensive and complex to set up, very little say, more regulated from the government.

Types of BusinessesOther Forms of Business

Franchise- owner is the only seller of a certain product in the right area. Owner pays a fee to the supplier for that right

Non Profit organization Goods and services without

trying to make a profit Public Schools Public Hospitals Labor Unions Boy Scouts/Girl Scouts

Types of Businesses Cooperatives- A voluntary association of people formed to carry on an economic activity.

- Consumer cooperatives buy bulk amounts of goods on behalf of their members. Members donate time to run the operation to keep cost down

https://www.youtube.com/watch?v=pPVkG9krOMI

Types of BusinessesPartnership Both Sole

Proprietorship