Ms Staker Sole Proprietorship business owned and run

Ms. Staker

� Sole Proprietorship – business owned and run by ONE PERSON. �S. P. can have many employees, but are still only owned by one person.

� STRENGTHS: 1. 2. 3. Don’t have to share your profits Don’t have to pay business taxes You are your own boss!

� Weaknesses: 1. 2. 3. Owner has unlimited liability Difficult to raise $ to start a business Limited life – when owner quits, firm is done “Who’s gonna take care of all this money when I’m gone? ”

� Limited Liability: You can only lose what you started out with ($) �Partnership, Corporation � Unlimited Liability: You are legally bound to pay debts of your business �Sole Proprietorship

� Limited Life: Once an owner quits, dies, etc. , the business dies too �Sole Proprietorship, Partnership � Unlimited Life: The business goes on even if someone leaves. �Corporation

� Partnership: business owned by 2 or more persons �General Partnership: all partners are responsible for keeping the business going; finances �Limited Partnership: At least one partner is not active in the daily running of the business.

� STRENGTHS: 1. Limited Liability 2. Different talents 3. Partnerships get money easier than sole proprietorships

� WEAKNESSES: 1. 2. 3. Each partner is responsible for acts of all other partners. Limited life Potential conflict between partners

� Corporation: a big business recognized by law as having the same rights of an individual � To form a corporation – you must ask for permission from government � If approved, you receive a charter: gov’t document giving you permission to create your corporation

� STRENGTHS 1. Easy to raise money – sell stock and bonds § Bonds: written promise by corp. to repay a person for an amount borrowed at a later date (plus interest)

� Corporations have stockholders / shareholders: investors in a corporation. � Stock: ownership of part of the business

STRENGTHS: (CON’T) 2. Can hire best management / talent 3. Limited liability for owners. 4. Unlimited life: business continues to exist even when ownership changes

5. Easy to transfer ownership – can sell your stock, leave the business

� � � WEAKNESSES: Difficult / expensive to get a charter Shareholders have little say in how the business is run (Board of Directors) Business must pay income taxes