Business Ownership Sole Proprietorship Partnership Corporation Franchise Sole

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Business Ownership • Sole Proprietorship • Partnership • Corporation • Franchise

Business Ownership • Sole Proprietorship • Partnership • Corporation • Franchise

Sole proprietorship • A business owned and run by one person • The business

Sole proprietorship • A business owned and run by one person • The business is typically managed by the owner. • Formation varies by state.

Advantages • • Easy to start up Complete control of the business Owner receives

Advantages • • Easy to start up Complete control of the business Owner receives all the profits Limited taxes (one time taxation)

Disadvantages • Limited capital (money) • Unlimited liability (responsible for ALL debt) • The

Disadvantages • Limited capital (money) • Unlimited liability (responsible for ALL debt) • The business is limited to the lifetime of the owner

Partnership • A business owned and controlled by two or more people who have

Partnership • A business owned and controlled by two or more people who have entered a written agreement • The management of the company depends on the partnership agreement.

Advantages • • • More capital and credit available than a sole proprietorship Combined

Advantages • • • More capital and credit available than a sole proprietorship Combined resources (money, expertise) Shared management responsibilities Shared risk Work load easier to manage than a sole proprietorship

Disadvantages • • Profits are shared Responsible for each others decisions Potential for disagreement

Disadvantages • • Profits are shared Responsible for each others decisions Potential for disagreement among partners Unlimited liability (depending on type)

Corporations • An organization owned by one or more shareholders and managed by a

Corporations • An organization owned by one or more shareholders and managed by a board of directors. • Ownership – Determined by purchase of stock – A stockholder, or shareholder, owns a ‘piece’ of the company – One share of common stock equals one vote

Advantages • Easier to obtain capital • Limited liability for shareholders • Life of

Advantages • Easier to obtain capital • Limited liability for shareholders • Life of the corporation is unlimited

Disadvantages • Double taxation (profits and earnings) • Government regulations and legal restrictions •

Disadvantages • Double taxation (profits and earnings) • Government regulations and legal restrictions • Decision-making shared among managers, board of directors, and shareholders

Franchise • Permission to operate a business to sell products and services in a

Franchise • Permission to operate a business to sell products and services in a set way • Begins with a parent company who owns the product or service and grants the right to another business • Franchiser: the company that owns the product • Franchisee: the company purchasing the right to run the business

What Business Ownership Type did you choose and why? 1. Tom, Sally, and Joan

What Business Ownership Type did you choose and why? 1. Tom, Sally, and Joan created a new video game that is selling over a thousand units per day! Angry Birds was created by a 15 year old student!

What Business Ownership Type did you choose and why? 2. Bob wants to start

What Business Ownership Type did you choose and why? 2. Bob wants to start a lawn service.

What Business Ownership Type did you choose and why? 3. Cousin Walter wants to

What Business Ownership Type did you choose and why? 3. Cousin Walter wants to open a hotel and would like people to invest in it.

What Business Ownership Type did you choose and why? 4. Aunt Vivian wants to

What Business Ownership Type did you choose and why? 4. Aunt Vivian wants to own her own Subway shop. http: //www. naturallyintense. net/blog/wpcontent/uploads/2009/11/subway-eat-fresh. jpg

What Business Ownership Type did you choose and why? 5. Your neighbors want to

What Business Ownership Type did you choose and why? 5. Your neighbors want to start a farmer’s market so everyone can have fresh vegetables and earn a little cash.