Ch.26-1 Main Forms of Business Organization By: Kendra Slaughter

Objectives State the definition of the three basic forms of business organization. Contract the attributes of the basic forms of business organization.

What’s your verdict ? Shirley wants to open a sporting goods store catering solely to women. She hesitates because she thinks the expenses would be prohibitive. She lists the costs of renting or buying the required space; hiring help; buying a computer to keep records; buying a large inventory; obtaining a charter from the state; and paying for license, legal fees, and accounting fees.

Principles Forms Organization There are three principle forms of business organization: 1. Sole Proprietorships 2.Partnerships 3.Corporations

Sole Proprietorships Sole Proprietorships – form of business owned by one person who has total unlimited control and liability. Of the three principle forms sole proprietorship is the simplest, most flexible and is easiest to start. The owner has relatively unlimited control over business and keeps all profits They are most used in bussiness

Legal Requirements for sole Proprients The are no significant legal requirements for organizing or conducting most sole proprientships. They are conducted out of the owner home garage or van. Local business licenses are needed.

Partnerships Partnerships- is an associations of two or more persons to carry on , as co-owners, a business for profit. They most common type is General Partnerships. Under the Uniform Partnership Act (UPA) governs partnerships in most states that general partnerships share all profits equally.

How does a Partnership ends ? A partnership ends if a partner dies, withdraws, or goes bankrupt

Corporations Corporations-is a legal entity that is treated as an artificial person by the law. Has an existence distinct or separate from the real person who organized own and run it.