Types of Business and Business Ownerships

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Importance

in the Economy

of Entrepreneurship

The

Types of Business and
Business Ownership

Big Idea and EQ!

Big Idea: Different forms of business ownership have distinct characteristics and implications, shaping their role in the national and international business landscape.

Essential Question: How do the various types of business organizations differ from one another, and how do these differences influence their roles within the socioeconomic dynamics of both national and international markets?

VICIOUS CYCLE OF DEVELOPMENT

Roles of Entrepreneurs in the Economy

Multiple Choice

Which of the following is being described below:

"Entrepreneurs sometimes use their own savings as capital for their business ventures. However, if they do not have the capital, money can be borrowed from banks to finance their intended business."?

• Mobilizers of Capital

• Service Providers

• Employers

• Suppliers

Mobilizers

of Capital

01

Entrepreneurs sometimes use their own savings as capital for their
business ventures. However, if they do not have the capital, money

can be borrowed from banks to finance their intended business.

Multiple Choice

Which of the following is being desctibed below:

"Business ventures of entrepreneurs could be along the line of service like parlors, spas, or coffee shops."?

• Service Providers

• Employers

• Suppliers

• Tax Payers

Service

Providers

02

Business ventures of entrepreneurs could be along the line of

service like parlors, spas, or coffee shops.

Employers

03

Entrepreneurs hire people to help them in their business.

Tax

Payers

04

Business establishments pay taxes to the government. Thus, more
business would mean more taxes and better government services.

Suppliers

of Products

05

Products and services are available through the efforts of the

entrepreneurs. Without them, a scarcity of certain products and

services will be felt.

What is an

Economic System?

Fill in the Blanks

It refers to a social science concerned with how people satisfy their demands for goods (things you can buy) and services (things people do for a fee) when the supply of those goods and services is limited.

ECONOMICS

a social science concerned with how people satisfy
their demands for goods (things you can buy) and

services (things people do for a fee) when the supply

of those goods and services is limited.

ECONOMIC SYSTEM (ECONOMY)

a method used by a

society to allocate goods
and services among its
people and to cope with

scarcity

THINK ABOUT THIS!

Types of Economic Systems

use to compare how societies

deal with the fundamental

questions of economics

Multiple Choice

What type of economy refers to the government owns or manages the nation’s resources and businesses?

• The Command Economy

• The Market Economy

The COMMAND

Economy

01

the government owns or manages the nation’s

resources and businesses

The MARKET

Economy

02

suppliers produce whatever goods and services they wish
and set prices based on what consumers are willing to pay

Prices are responsive to consumer demand

Multiple Choice

It refers to the quantity of goods and services a business is willing to sell at a specific price and a specific time.

• Supply

• Demand

SUPPLY AND DEMAND

SUPPLY is the
quantity of goods
and services a
business is willing
to sell at a specific
price and a
specific time.

DEMAND is the

quantity of goods

and services

consumers are

willing to buy at a

specific price and a

specific time.

Types of Business and
Business Ownership

Multiple Choice

A type of business that converts materials into goods suitable for use and then sells those goods to others

• Manufacturing

• Wholesaling

• Retailing

• Service

Multiple Choice

A type of business that buys goods in large quantities, typically from manufacturers, and resells them in smaller batches to retailers.

• Manufacturing

• Wholesaling

• Retailing

• Service

Multiple Choice

A type of business that provides services to customers for a fee.

• Manufacturing

• Service

• Retailing

• Wholesaling

converts materials into goods
suitable for use and then sells

those goods to others

buys goods in large quantities,
typically from manufacturers, and
resells them in smaller batches to
retailers

buys goods, often from

wholesalers, and resells them
directly to consumers, who are

the end buyers

provides services to
customers for a fee

Manufacturing

Retailing

Wholesaling

Service

Types of Business

01

02

03

04

Special Types of

Businesses

Farming is a combination

of manufacturing and
retailing when fruits or

vegetables are sold

directly to the consumer.

Miningtakes resources
from the environment and
converts them into a form
that can typically be sold
to manufacturers

Multiple Choice

It refers to a legally defined type of business ownership in which a single individual owns the business, collects all profit from it, and has unlimited liability for its debt.

• Sole Proprietorship

• Partnership

• Corporations

• Cooperations

(1) Sole Proprietorships

(2) Partnerships
(3) Corporations
(4) Cooperatives

Types of Business

Ownerships

Sole Proprietorships

a legally defined type of business ownership

in which a single individual owns the

business, collects all profit from it, and has

unlimited liability for its debt

01

Open Ended

Give one advantage and one disadvantage of being a sole proprietorship.

Advantages

Disadvantages

●Simplest and least
expensive option for
business ownership.

●The sole proprietor is
also the sole decision
maker, with complete
control over the
management of the
business.

●The sole proprietor has to carry a heavy
workload—raising the financial backing to
set up, operate, and expand the business.

●The sole proprietor has unlimited liability for
any business debts.

●Sole proprietors often find it difficult to
borrow money or attract investors.

●If they are unable to work, or make poor
decisions, the business could fail.

Multiple Choice

It refers to a a legally defined type of business organization in which at least two individuals share the management, profit, and liability.

• Sole Proprietorship

• Partnership

• Corporations

• Cooperatives

Partnerships

a legally defined type of business

organization in which at least two individuals

share the management, profit, and liability

02

Open Ended

Give one advantage and one disadvantage of partnership.

Advantages

Disadvantages

●a general partnership can rely on the
entrepreneurial skills and financial
backing of at least two individuals
instead of just one

●general partnerships can attract and
motivate employees with the
incentive of becoming partners in the
business at some point in the future

●profit is split between the
partners

●each partner is responsible
for the business-related
actions of all the others

●partners may have trouble
agreeing on how the business
should be operated

Multiple Choice

It refers to a a legally defined type of business ownership in which the business itself is considered a type of “person” (often referred to as an “entity”) under the law, and limited liability is granted to the business owner(s).

• Sole Proprietorship

• Partnership

• Corporations

• Cooperatives

Corporations

a legally defined type of business ownership in which

the business itself is considered a type of “person”
(often referred to as an “entity”) under the law, and
limited liability is granted to the business owner(s)

03

Shareholders or

Stockholders

A share of stock is a unit of
ownership in a corporation.
Corporations sell shares to
raise money.

Open Ended

Give one advantage and one disadvantage of corporations.

Advantages

Disadvantages

●Shareholders have a limited liability. They
risk only the money they invested in the
corporation.

●Shareholders can end their ownership by
selling their shares to someone else. Shares
also trade hands when shareholders die.

●The life-span of a corporation is not tied to
the life span of its owners.

●Management of a corporation is delegated
to the board of directors, who typically hire
the corporation’s officers. All of this means
corporations can raise money more easily
than sole proprietorships and partnerships.

●The corporations are more difficult
and expensive to set-up and maintain
than other business structures.

●Corporations must follow very
specific procedures for keeping
records and selling shares.

●Corporations are not taxed the same
way as sole proprietorships and
partnerships. Corporate profit is
taxed twice. A corporation pays taxes
on the profits it earns. Then the
shareholders pay personal taxes on
corporate dividends received.

Nonprofit
Corporations

a legally defined type of business ownership in which the
company operates not to provide profit for its shareholders
but to serve the good of society

Cooperatives

a business owned, controlled, and operated for the
mutual benefit of its members—people who use its

services, buy its goods, or are employed by it

04

Draw

Draw your reaction for today's lesson.