Chapter 61 Introduction to Business and Marketing The Main Idea Sole proprietorships partnerships and corporations are the most common forms of business organization Cooperatives nonprofits and franchises are other forms ID: 1003804
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1. Types of Business OwnershipChapter 6.1Introduction to Business and Marketing
2. The Main IdeaSole proprietorships, partnerships, and corporations are the most common forms of business organization. Cooperatives, nonprofits, and franchises are other forms.
3. Organizing a BusinessThe three main types of business organizations are:SoleProprietorshipsPartnershipsCorporations
4. Types of Business OwnershipFigure 6.1U.S. Sole Proprietorships, Partnerships, and Corporations
5. Sole ProprietorshipAbout 3/4 of all businesses in the United States are sole proprietorships.sole proprietorshipa business owned by one person
6. Sole ProprietorshipEasy to startOwner keeps all the profitOwner has total controlTaxes are lower than a corporationUnlimited liabilityLimited access to creditOwner may not have the necessary skillsMany run out of moneyBusiness dissolves when owner diesAdvantagesDisadvantages
7. PartnershipTo start a partnership you must have a partnership agreementpartnershipa business owned by two or more people who share its risks and rewards
8. PartnershipEasy to startEasier to get capitalEasier to obtain creditNot dependent on one personOnly taxed onceDiversity of skillsBusiness risk is shared among all partnersUnlimited legal and financial liability is sharedIf one member makes a mistake all are responsibleAdvantagesDisadvantages
9. CorporationsTo form a corporation, the owners must get a corporate charter from the state where their main office will be locatedcorporationa company that is registered by a state and operates apart from its owners
10. CorporationsOne of the major advantages of a corporation is limited liabilitylimited liabilityholds a firm’s owners responsible for no more than the capital that they have invested in it
11. CorporationLimited LiabilityAbility to raise money by selling stockBusiness does not end when an owner diesDouble taxationIncomeStock holder dividendsMore government regulationDifficult and costly to startAdvantagesDisadvantages
12. OTHER ways to Organize a BusinessOther ways to organize a business include:CooperativeNonprofitOrganizationFranchise
13. CooperativeThe purpose of a cooperative is to save money on the purchase of certain goods and servicescooperativean organization that is owned and operated by its members
14. NONPROFIT ORGANIZATIONA nonprofit organization does not pay taxes because it does not make a profitnonprofit organizationa type of business that focuses on providing a service, not making a profit
15. FRANCHISEThe run a franchise, you have to invest money and pay franchise fees or a share of the profitsfranchisea contractual agreement to use the name and sell the products or services of a company in a designated geographic area