Business Organizations

1
Business Organizations

• Chapter 8

2
Business Organizations

• A business organization is an establishment
  formed to carry on a commercial enterprise.
• In other words, a business organization is a
  company, or firm.

3
Sole Proprietorship

• A sole proprietorship is a business owned and
  managed by a single individual

4
Sole Proprietorship

• Advantages
• Ease of start up
• Relatively few regulations
• Sole receiver of profit
• Full control
• Easy to discontinue

• Disadvantages
• Unlimited personal liability
• Limited access to resources
• Lack of permanence

5
Partnerships

• A partnership is a business organization owned by
  two or more persons who agree on a specific
  division of responsibilities and profits
• A general partnership is one in which the members
  share equally in both responsibility and
  liability
• A limited partnership is one in which only one
  partner is a general partner (the others
  contribute only money)

6
Partnerships

• Advantages
• Ease of start up
• Shared decision making and specialization
• Larger pool of capital
• Taxation

• Disadvantages
• Unlimited liability
• Potential for conflict

7
Corporation

• A corporation is any business or firm that is a
  legal entity which is publicly owned and traded
  through stock.
• A stock is a certificate of ownership in a
  corporation

8
Corporation

• Advantages
• -stockholders
• -limited liability
• -corporation
• -many resources
• -long life span

• Disadvantages
• -stockholders
• -loss of control
• -double taxation
• -corporation
• -difficulty and expense of start-up
• -more regulations