BUSINESS ORGANIZATIONS Sole Proprietorships A business owned and
BUSINESS ORGANIZATIONS
Sole Proprietorships § A business owned and operated by one person. § ADVANTAGES: § Ease of Start-up § Full Control § Exclusive right to profits
Sole Proprietorships § DISADVANTAGES: § § Unlimited Liability Sole Responsibility Limited growth potential Lack of longevity
Partnerships § Business owned and operated by two or more people. § General Partnership: -Partners share decision making and have unlimited liability. § Limited Partnership: -Partners join as investors, providing financial capital for a share in the profits. -They don’t make business decisions and their liability is equal to their investment.
Partnerships § Advantages: -Ease of Start up -Specialization -Shared decision making -Shared business losses
Partnerships § Disadvantages: -Unlimited Liability -Potential for conflict -Lack of Longevity
Corporations § Businesses that are publicly traded and financed by stock holders § Advantages: -Benefits for Stockholders -limited liability -Benefits for Corporations -limited liability for founders -separation of ownership and management -people who do not know about a particular discipline can still fund the venture. -Ease of raising financial capital -Longevity
Corporations § Disadvantages: -Corporate Issues -Difficult & Expensive to obtain a corporate charter. -Government regulates corporations much more closely. -Slow decision making process.
Corporate Combinations § Horizontal Combination Merger between two or more companies producing the same good or service § Vertical Combination Merger between two or more companies involved in different production phases of the same good or service. § Conglomerate Combination A merger of companies producing unrelated products.
In groups of 3 -4…. . § You must develop a Partnership. § Outline an overview of your business (1 page) § Include: § § § § -Type of business -Is it a General or Limited Partnership Who makes the decisions? -How will you fund/take liability for your business -Who will do exactly what job *****HOW WILL PROFITS BE DIVIDED***** MAKE YOUR BUSINESS AS REALISTIC AS POSSIBLE - SOMETHING YOU WOULD ACTUALLY WANT TO BE INVOLVED IN!
- Slides: 10