The document provides an overview of different forms of business ownership including sole proprietorships, partnerships, corporations, and cooperatives. It discusses the key characteristics of each type of business structure and compares their advantages and disadvantages. The text also examines topics like competition, business risks, and profit distribution. Various business concepts are defined throughout such as entrepreneur, unlimited liability, articles of incorporation, and board of directors.

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2. Business and Personal Finance Copyright © by McGraw-Hill Education. All rights reserved.
Describe the effects of competition on businesses and
consumers.
Explain how competition impacts the consumer.
Identify the advantages and disadvantages of a sole
proprietorship.
Explain the differences between general and limited partners.
Identify the advantages and disadvantages of a partnership.
Identify the advantages and disadvantages of a cooperative.

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What is Business?
What are the type of Business we have today?
What is Private Enterprise System?
What is the difference between Monopoly and oligopoly
in Business.

4. Business and Personal Finance Copyright © by McGraw-Hill Education. All rights reserved.
Business Ownership Organization
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Three Legal Forms of Business Ownership
Sole
Proprietorship
Partnership Corporation
Definition, Advantages and disadvantages of each team

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Group Activity
Sole
Proprietorship
Group A
Partnership
Group B
Corporation
Group C
Hoor Mariam Shaheen
Zeina Heba Yazeed
Hadeel AlAnoud Muhannad
Bodour Abdul Aziz Sayed
Fahad

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Session Two

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Private Enterprise System
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Public schools
are part of the
public sector.
public sector
government-funded
services
Your local
supermarket is part of
the private sector.
private sector
business not funded by the
government

8. Business and Personal Finance Copyright © by McGraw-Hill Education. All rights reserved.
Private Enterprise System
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Discounts and
coupons are examples
of price competition.
competition
the struggle among businesses for customers
Excellent service and
quality construction
are examples of
nonprice competition.
Two Types of Competition
price competition
struggle for business that assumes consumers will choose the
lowest priced products available
nonprice competition
struggle for business that relies on factors other than price
to attract and keep customers

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Private Enterprise System
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Levels of
Competition
Market
Oligopoly
Monopoly
market
field of exchange that takes place
between buyers and sellers
oligopoly
market condition
characterized by the
existence of a few large
businesses in a market
monopoly
market condition characterized by
the existence of only one supplier
in a market.

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Private Enterprise System
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Risks of
Doing
Business
Competition
Economic
Changes
Government
Regulations
New
Technologies
Natural
Disasters
Lawsuits

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Private Enterprise System
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Who benefits when a business makes a profit?
Employees
The government (taxes)
The economy
Other businesses
Society
profit
the money left after paying the
expenses of doing business

12. Business and Personal Finance Copyright © by McGraw-Hill Education. All rights reserved.
Section 1 Private Enterprise and Business Ownership
Review the forms of Business
Identify the differences between the 3 forms
Explain the Franchise business
Chapter
3
Types of Business Ownership

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https://www.youtube.com/watch?v=x8LqdZnOnIU

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Sole Proprietorship
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
A sole proprietorship is usually started
by an entrepreneur.
sole proprietorship
business owned by one person
entrepreneur
individual who takes the risk of
starting a new business

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Sole Proprietorship
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Advantages of Sole Proprietorship
Easy Setup
Licensing and Paperwork
– Employer Identification Number (EIN)
Total Control
Profits to Owner
Profits Taxed Once
Few Government Regulations
Employer Identification Number (EIN)
number assigned by the IRS used for income tax purposes

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Sole Proprietorship
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Disadvantages of Sole Proprietorship
Limited Capital
Unlimited Liability
Limited Human Resources
Limited Life
unlimited liability
situation in which the owner of a business is responsible to
pay the business debts out of personal assets
limited life
situation in which a business’s life span or existence is
determined by the owner’s life span or decision to terminate
the business

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The Partnership
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
A partnership requires a
partnership agreement.
partnership
business owned by two or more persons
partnership agreement
written document that states how a partnership will be organized

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The Partnership
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
general partner
business partner who has decision-making authority,
takes an active role in the operation of the business, and
has unlimited liability
limited partner
business partner who does not take an active role in decision
making or in running the business
General
Partner
Limited
Partner
Two Types of Partners

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The Partnership
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Advantages of a Partnership
Easy Setup
More Skills and Knowledge
Available Capital
Total Control by Partners
Profits Taxed Once

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The Partnership
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Disadvantages of a Partnership
Unlimited Liability
Possible Disagreement Among Partners
Shared Profits
Limited life

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The Partnership
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership

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The Cooperative
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Advantages of a Cooperative
Each member has an equal vote
Each member has some control over the business
Saving money on purchases
Pooled resources
cooperative
an organization that is owned and
operated by its members

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The Cooperative
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership
Disadvantages of a Cooperative
All decisions must be approved
Limited flexibility
Slow decision-making
Limited capital
Retaining and recruiting new members

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You are starting your own business repairing bicycles. Your
uncle is supplying money for start-up costs. Decide whether
your uncle should be a general partner or limited partner.
Sample response: My uncle should be a limited partner
so that I can control the business and he will not lose
additional money if my venture does not work.
Section 1 Private Enterprise and Business Ownership
Chapter
3
Types of Business Ownership

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Chapter
3
Types of Business Ownership

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Section 2 The Corporation
Describe two types of corporations.
Summarize the process of forming a corporation.
Discuss the advantages and disadvantages of a corporation.
Discuss the advantages and costs of a franchise.
Chapter
3
Types of Business Ownership

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What Is a Corporation?
Section 2 The Corporation
Chapter
3
Types of Business Ownership
About 20 percent of businesses in the United
States are organized as corporations, but they
produce about 90 percent of the total
business revenue in the United States.
corporation
business organization that operates as legal entity that
is separate from its owners and is treated by law as it if
were an individual person

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Starting a Corporation
Section 2 The Corporation
Chapter
3
Types of Business Ownership
Paperwork
and
Documents
Articles of
Incorporation
Corporate Bylaws
Corporate Charter
articles of incorporation
an application to operate as a corporation
corporate bylaws
rules by which a corporation must operate
corporate charter
a license to operate a corporation

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Starting a Corporation
Section 2 The Corporation
Chapter
3
Types of Business Ownership
Shares of stock in a corporation are bought by
people who become known as stockholders.

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Starting a Corporation
Section 2 The Corporation
Chapter
3
Types of Business Ownership
Closely Held
Corporation
Two Types of Corporations
Publicly Held
Corporation

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Starting a Corporation
Section 2 The Corporation
Chapter
3
Types of Business Ownership
Individuals
Organizations
Advantages of the Corporation
Ability to raise capital
Limited liability
Continued life
Separation of ownership and management
– Board of directors
board of directors
group of individuals who are responsible for
overseeing the general affairs of a corporation

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