There are several forms of business ownership including proprietorships, partnerships, and corporations. Proprietorships are owned and run by one person, partnerships are owned by two or more individuals who share profits and losses, and corporations are separate legal entities with stockholders and boards of directors. Other forms include limited liability partnerships, joint ventures, S-corporations, limited liability companies, nonprofits, franchises, and cooperatives. Each form has different legal requirements and structures regarding ownership, control, liability, and taxation.

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

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