Lesson 5 2
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Forms of Business Ownership

Forms of Business Ownership
(Intro to Business, 6e)

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Lesson 5 2 Presentation Transcript

  • 1. Lesson 5-2 Forms of Business Ownership
  • 2. Proprietorship
    • Business owned and run by one person
    • Easiest to start
    • Few legal requirements
    • More control over business decisions
    • Owner receives all profits
    • Owner is responsible for losses
    • No shelter from creditors (personal assets may be used to pay debt of business)
  • 3. Partnership
    • Business owned by two or more individuals
    • Written agreement
    • Easy to start
    • All partners are responsible for running business
    • All partners share in profits/losses
    • Partners responsible for decisions of each other
  • 4. Corporation
    • Separate legal entity (the business is treated as an individual)
    • Documents must be filed with state
    • Owned by shareholders (stockholders)
    • Managed by a board of directors
    • Difficult to begin
    • More legal requirements
    • Risk of stockholders limited to their investment in stock
  • 5.  
  • 6.  
  • 7. Articles of Partnership
    • Written agreement among all owners.
    • Details rules and procedures
    • Identifies
      • Business name
      • Investment of each member
      • Contributions of each member
      • Responsibilities of each member
  • 8. Articles of Incorporation
    • Written legal document that defines ownership and operating procedures and conditions of business
    • Must fill out state forms and be granted permission
    • Must have corporate bylaws
    • Must have board of directors
    • Issues shares of stock (private or public)
  • 9. Other Forms of Ownership
    • Limited liability partnership
    • Joint venture
    • S-corporation
    • Limited liability company
    • Nonprofit corporation
  • 10. Franchises
    • Franchise is a written contract granting permission to operate a business to sell products and services in a set way
      • Franchiser – company that owns the products or service and grants the rights
        • Assists with operations
        • Provides national advertising
      • Franchisee – company purchasing the rights to run the business
        • Maintains day-to-day operations
        • Pays a fee & percentages of profits to the franchiser
  • 11. Cooperatives
    • Business owned by members
    • Serves needs of members
    • Managed in the interest of members
    • Examples: Electric cooperatives, consumer cooperatives
  • 12. The End