Kinds of businesses

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Kinds of businesses

  1. 1. Business Organizations
  2. 2. <ul><li> Sole Proprietorship </li></ul>
  3. 3. Advantages For Lucy <ul><li>She gets all of the profit from business </li></ul>
  4. 4. Advantages For Lucy <ul><li>No ‘Red Tape’ – Hassle Free Start Up </li></ul>
  5. 5. Advantages For Lucy <ul><li>She gets to make all of the decisions </li></ul>
  6. 6. Advantages For Lucy <ul><li>Her business is not a legal person so she does not pay income taxes and her business can’t be sued. </li></ul>
  7. 7. Advantages For Lucy <ul><li>She has the freedom to choose her coworkers </li></ul>
  8. 8. Disadvantages For Lucy <ul><li>Lucy has unlimited liability which means she can lose everything if her business goes broke (even Schroeder) </li></ul>
  9. 9. Disadvantages For Lucy <ul><li>The financial cost for starting the business may be so high that she may not be able to afford it. </li></ul>
  10. 10. Disadvantages For Lucy <ul><li>She may be a pretty bad manager and be put out of business by Snoopy’s Piloting Service </li></ul>
  11. 11. Partnership
  12. 12. Advantages
  13. 13. Disadvantages
  14. 14. Corporation
  15. 15. Corporation <ul><li>A business that is legally an individual and has issued a set amount of stock. </li></ul>
  16. 16. Corporation - Advantages <ul><li>Ronald McDonald’s finds it very easy to raise money to start their business by selling stock to Grimace, who now is part owner of McDonald’s. </li></ul>
  17. 17. Corporation - Advantages <ul><li>McDonald’s can also raise money for its business by selling bonds to the Hamburgler. </li></ul>
  18. 18. Corporation - Advantages <ul><li>Grimace and the Hamburgler have limited liability – They can only lose what they invest. </li></ul>
  19. 19. Corporation - Advantages <ul><li>Because of unlimited life Ronald McDonald will always exist, no matter who the owner is. </li></ul>
  20. 20. Corporation - Advantages <ul><li>Grimace can easily sell his stock to Birdie who is now one of the owners of McDonald’s </li></ul>
  21. 21. Corporation - Disadvantages <ul><li>McDonald’s may have to pay huge fees to obtain a charter from the government. </li></ul>
  22. 22. Corporation - Disadvantages <ul><li>Even though the Fry Guys own stock in McDonalds, they have no say in how it is run (which may actually be a good thing). </li></ul>
  23. 23. Corporation - Disadvantage <ul><li>Because McDonald’s is legal entity it get taxed twice, once as an individual and once as a business (which means Ronnie will have to sell double the Happy Meals). </li></ul>
  24. 24. Corporation - Disadvantages <ul><li>McDonald’s faces many regulations by the government. For example, routine checks by the Security and Exchange Commission (3 members pictured to the right) to make sure they are treating their shareholders fairly. </li></ul>

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