22620 WedECON BW Pick up new paper from

2/26/20 (Wed)—ECON BW: Pick up new paper from the front and write down LO #1. On the back of your paper, write down the top 3 topics that you want to cover this semester: Global trade; unemployment and GDP; supply/demand; personal finances (taxes, banking) LO: I can compare/contrast business organizations IN-CLASS: BW—LO—Notes/questions—reflections

2/27/20 (Thur)—ECON BW: Pick up new paper from the front and write down LO #1. On the back of your paper, write down the top 3 topics that you want to cover this semester: Global trade; unemployment and GDP; supply/demand; personal finances (taxes, banking) LO: I can compare/contrast business organizations IN-CLASS: BW—LO—Notes/questions—reflections

Business Organizations

Business Organizations Business organization (firm) – establishment formed to bring goods and services to the market 3 types 1) Sole proprietorship 2) Partnership 3)Corporation

Percentage of Businesses in the US Business Organizations in the US 8% 19% 73% Partnerships Corporations Sole Proprietorships

What is Liability? Liability – legal obligation to pay debts/injury settlements incurred by the business

Sole Proprietorship – There is no difference between the business and the owner in the eyes of the law. Q - What happens if someone gets hurt at their business? A - They are held liable (responsible) for the injuries.

Sole Proprietorship – There is no difference between the business and the owner in the eyes of the law. Because there is no legal separation between Bob and his business, Bob could lose everything he worked for.

*Teacher Notes* I show these videos to represent a sole proprietor 1. https: //www. youtube. com/watch? v=TEj. Lr. Yc SRj 4 2. https: //www. youtube. com/watch? v=AK 26 Xp Wyz. Ls 3. https: //www. youtube. com/watch? v=u. H 6 Kh Noh-Cc 4. http: //iwanttodrawacatforyou. com/

Sole Proprietor Sole proprietorship – a business owned and run by one person Most common type of business organization 73% of all businesses are sole proprietorships in the U. S.

*Teacher Notes* I show these videos to represent a partnership 1. https: //www. youtube. com/watch? v=p. Xb. H 1 Yia 0 cs 2. https: //www. youtube. com/watch? v=UCe_XH 8 dfmw&index=22&list=PL 259 C 0982150 A 872 C&t=0 s 3. https: //www. kisstixx. com/

Partnership – a business organization owned by two, or more people who agree to split responsibilities and profits Account for about 8% of all businesses

General Partnership – partners share profits, liability and responsibility Fast food, lawyers, bars, small businesses Both workers are actively involved in the company, 5050 split

Limited Partnership – consists of a general partner who runs the business and has unlimited liability Limited partners are limited from personal liability; generally investors in the business Legal buffer for one partner from personal liability Limited Partners

3/3/20 (Tue)—ECON BW: Make sure you have the first LO written down. Be ready to answer the question: What are some ideas that you have for your midterm business project? LO: I can compare/contrast business organizations IN-CLASS: BW—LO—Notes/questions—reflections

Q- What happens if someone gets hurt at a major corporation? A – The company gets sued but not the investors/shareholders.

Corporation – is a separate legal entity, or legal being, owned by shareholders, each of whom faces limited liability for the firms debt Shareholders face no liability for the firm’s obligations Corporations are considered a separate legal entity Account for 19% of all businesses, but 62% of all products sold ebay

*Teacher Notes* Hamburger U I show this video to show the training program for the Mc. Donalds corporation • https: //www. youtube. com/watch? v=s. ICEm. Bp APq 0&list=PL 259 C 0982150 A 872 C

I show the below video to show corporations are considered a separate legal entity. People sue the company, not the shareholders. Video Link – Person burned by coffee Mc. Donalds dealt with this when a person was burned by a hot coffee.

Typical Corporate Structure

Q- What is the downside of incorporating and going public? A - Steve Jobs was pushed out/fired from the company he started.

Publicly Traded Company Stock – a certificate of ownership in a corporation Partial owner , i. e. 1000 shares, purchase 1, 1/1000 th owner of the company Closely held – privately held corporations, that do not trade stock on the public exchange Hobby Lobby Publicly held – sells stock on the market in to investors in order to grow the business Facebook

Google Videos I show these videos to represent the corporate environment at Google http: //www. youtube. com/watch? v=z 8 wq. S 7 Vk. Acw&li st=PL 259 C 0982150 A 872 C&index=9

Mergers • Merger – combine with another company to become one entity • Horizontal merger – firms in the same market with a similar good or service merge – Google and Youtube – Facebook and Instagram

Mergers Vertical merger(integration) – firms join two or more firms involved in different stages of producing the same good Control all phases of the product from production to sales (monopoly) Customer Retail Sales Final Assembly Manufacturing Raw Materials

Conglomerates – business mergers with large companies, more than three businesses

Multinationals – large corporation that produces and sells its goods and services throughout the world

Other Organizations Business Franchise – semi-independent business that pays fees and royalties to a parent company Business is granted right to sell using the name, product and brand of the company Zaxbys, Mc. Donalds, Subway, etc.

Forms of Business Organizations Business Description Organization Sole Proprietorship • Owned/run by 1 person • “Cat Guy” Advantages Disadvantages 1. Unlimited Personal 1. Ease of Start Up – Liability – personally take an idea and responsible for all start the business debts and injuries 2. Relatively Few 2. Limited Access to Regulations – least. Resources – often regulated, least use their own paperwork to start money, expanding is 3. Sole Receiver of slow Profit – keep all the 3. Lack of Permanence money, taxed once S. P. dies, business 4. Full Control – make dies all the decisions 5. Easy to Discontinue – end the business

Forms of Business Organizations Business Description Organization Partnership • Owned/run by 2 or more persons • “Kisstixx” Advantages Disadvantages 1. Easy to start – 1. Unlimited inexpensive to begin Personal Liability – 2. Shared Decision personally Making and responsible for all Specialization - 2 debts and injuries heads are better 2. Potential for than 1 Conflict – 3. Larger Pool of Capital disagreements on - easier to borrow money direction of the 4. Taxation – taxed company once

Forms of Business Organizations Business Description Organization Corporation Advantages Disadvantages 1. Difficulty and • Separate • Advantages for Expense of Start-up – legal entity Stockholders – more paperwork and (corporation limited is liability expensive to start a person) • Advantages for 2. Double taxation • “Wal-Mart” Corporation – more taxed twice (once on sales, once on salary) potential for 3. Loss of Control – growth Owners can lose control of business when they sell stock (Steve Jobs) 4. More regulation – oversight and documentation (quarterly tax reports)

Forms of Business Organizations Business Description Organization Franchise • Semiindependent business • Pays fees to a parent company • “Mc. Donalds” Advantages 1. Management Training and Support – professional training and infrastructure of the company 2. Standard quality products, rules and processes 3. National advertising programs – parent company pays for ad campaigns 4. Financial assistance – loans from parent company 5. Centralized buying power - bulk purchases bring down cost Disadvantages 1. High franchising frees and Royaltiesexpensive startup costs and share of money to use the name 2. Strict operating standards – follow the parent company’s rules 3. Purchasing restrictions - buy from specific vendors 4. Limited product line – lack of creativity with products

Essential Question #1 1. How do the 3 business organizations differ? one person – A sole proprietorship is owned and operated by __________ 2 or more people – Partnerships are owned by ________ shareholders – Corporations are owned by __________