Business Organizations Chap. 7

Three Main Business Organizations in the U.S. Sole Proprietorship aka:  Mom-and-pop stores  Small businesses  Independent businesses  Local examples: Partnerships – dental offices Corporations - examples

Advantages/Disadvantages of Sole Proprietorships Advantages Full-control – be your own boss Keep all profits Make all decisions Set-own hours Easy to start-up Disadvantages Sole responsibility Unlimited liability Lack of growth potential Hard to get bank loans Lack of longevity

Advantages/Disadvantages to Partnership Advantages Specialization of each partner Shared decision making Shared business losses Easy to start-up Disadvantages Unlimited liability Potential for conflict Lack of longevity

Advantages/Disadvantages of Corporations Advantages Limited liability for founders and stockholders Separate ownership & management Easy to raise capital Longevity Disadvantages Expensive & difficult to set-up Increased State & Fed. Regulation Stiffer legal regulations Slow decision making Lack of control for stockholders/owners Double-taxation of profits