<ul><li>Chapter 2: The American Business </li></ul><ul><li>Enterprise System </li></ul><ul><li>Business Form Characteristi...
Our Business System <ul><li>Principles: </li></ul><ul><li>Freedom of choice </li></ul><ul><li>Private property rights </li...
Individually Owned (Proprietorship) <ul><li>A business enterprise where the individual owns, operates, manages, and receiv...
Partnership <ul><li>A business enterprise owned and controlled by two or more people who have agreed to operate on a partn...
Corporation: Investor-Oriented <ul><li>A (State-chartered) business that has the right to buy and sell goods and services....
Corporation: Cooperative <ul><li>A user-owned and user controlled (State-chartered) business in which benefits are receive...
Hybrid: Limited Liability Company <ul><li>A business structure that combines characteristics of both a partnership and a c...
Comparison of Methods of Doing Business  Features Individual-Owned Partnership Investor-Oriented Cooperative Corporate For...
Free Enterprise Systems  Ownership Profit incentive S 1.8 Two major differences: ownership and profit incentive Individual...
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Agri 2301 part I ch 2 legal forms of business enterprises

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Describes the legal forms of business enterprises

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Agri 2301 part I ch 2 legal forms of business enterprises

  1. 1. <ul><li>Chapter 2: The American Business </li></ul><ul><li>Enterprise System </li></ul><ul><li>Business Form Characteristics </li></ul>
  2. 2. Our Business System <ul><li>Principles: </li></ul><ul><li>Freedom of choice </li></ul><ul><li>Private property rights </li></ul><ul><li>Profit motives of owners </li></ul><ul><li>Owner control </li></ul>S 1.1
  3. 3. Individually Owned (Proprietorship) <ul><li>A business enterprise where the individual owns, operates, manages, and receives the earnings of the business </li></ul><ul><li>(The oldest and most common method of doing business.) </li></ul>S 1.2
  4. 4. Partnership <ul><li>A business enterprise owned and controlled by two or more people who have agreed to operate on a partnership basis. </li></ul><ul><li>(Family partnerships are common in farming.) </li></ul>S 1.3
  5. 5. Corporation: Investor-Oriented <ul><li>A (State-chartered) business that has the right to buy and sell goods and services. </li></ul><ul><li>(Operated as a profit-making enterprise for its investors.) </li></ul>S 1.4
  6. 6. Corporation: Cooperative <ul><li>A user-owned and user controlled (State-chartered) business in which benefits are received in proportion to use. </li></ul><ul><li>(Commonly used in agriculture to buy, sell, and service individual farm businesses.) </li></ul>S 1.5
  7. 7. Hybrid: Limited Liability Company <ul><li>A business structure that combines characteristics of both a partnership and a corporation. It combines the single-tax treatment of a partnership with the limited personal liability of a corporation. As in a cooperative, LLC owners are called members. </li></ul><ul><li>(Becoming increasingly common in agricultural business today.) </li></ul>S 1.6
  8. 8. Comparison of Methods of Doing Business Features Individual-Owned Partnership Investor-Oriented Cooperative Corporate Form Hybrid Limited Liability Who uses the Nonowner Generally Generally Generally the Generally services? customers nonowner nonowner members nonowner customers customers customers ---------------------------------------------------------------------------------------------------------------------------------- Who owns the The individual The partners The stockholders The members The members business? ---------------------------------------------------------------------------------------------------------------------------------- Who votes? Not applicable The partners Common stockholders The members The member ---------------------------------------------------------------------------------------------------------------------------------- How is voting Not applicable Usually by By shares of One-member, Usually by conducted? Partners’ share common stock one-vote or members’ in capital proportional share in capital ----------------------------------------------------------------------------------------------------------------------------------- S 1.7
  9. 9. Free Enterprise Systems Ownership Profit incentive S 1.8 Two major differences: ownership and profit incentive Individually owned The individual Profit for the individual owner ----------------------------------------------------------------------------------------------------------------- Partnerships Two or more individuals Profit for the two or more partners ----------------------------------------------------------------------------------------------------------------- Investor-oriented The stockholders Profit (dividends) for stockholders ------------------------------------------------------------------------------------------------------------------ Cooperative corporations The members Profit for members (higher income) ------------------------------------------------------------------------------------------------------------------ Limited-liability corporation The member investors Profit for member investors ------------------------------------------------------------------------------------------------------------------ Public business The public Least cost to taxpayers

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