Business Organizations

What are the three types of business organizations

• partnership, sole proprietorship, corporation

• command, traditional, & market

• partnership, corporation, liability

• proprietorship, publically-owned, privately-owned

What is sole proprietorship?

• two or more owners, tend to be small

• one owner, tend to be large

• one owner, tend to be small

• legal entity that is similar to indviduals, may be small or large

What is a partnership?

• one owner, tend to be small

• two or more owners, tend to be small with few

• legal entity, may be large or small

• two ore more owners and a legal entity

What is a corporation?

• one owner, tend to be small

• two ore more owners, tend to be small and not employees

• legal entity, maybe large or small

• legal entity, tends to be be similiar to a proprietorship in the eyes of the law

What are the benefits of a sole proprietorship?

• one person that receives all the profits and income

• multiple people that share all the profits and income

• multiple people who make decisions for the better of the company

• responsible for all decisions and debts

What are the benefits of a partnership?

• one person that receives all the profits and income

• multiple people that share all the profits and income

• shared decision-making. Relatively easy to start

• responsible for all decisions and debts

What are the benefits of a corporation?

• owners have shared liabiity where ownership is separate and apart from the owner/shared interests.

• requires legal advice to start with minimal paperwork

• may have absentee ownership

• relatively easy to start and can share in decision-making

What are the costs of having a partnership?

• shared decision making - can rely on their expertise

• must decide what to do if someone decides they want to leave

• limited liability

• received all benefits, profits and income

What are the costs of having a sole proprietorship?

• one person can easily get financing

• responsible for all decisions and all debts

• limited liability

• receives all benefits, profits and income

What is a liability?

• a company's legal obligation to report to the SEC

• a company's legal ability to make decisions on the factors of production

• a company's legal financial debts or other obligations resulting from its daily business operations

• a company's legal financial decisions based on the overall balance sheet