Forms of Business Ownership March 6, 20013
Business Ownership What are some benefits to owning your own business? Major forms of business ownership are: Proprietorship Partnership Corporation
Proprietorship A business owned and run by just one person Easiest form of business to start and end Few legal requirements Gives owners control over business decisions Owner receives all profits, BUT is responsible for all debts If business fails, owner has no shelter from creditors. What does that mean?
In Your notes….. Proprietorships tend to have a high failure rate…..why do you think this is true? So easy to open! People usually start a business without much thought or planning. He/She is not always prepared for the challenges that will be faced.
Partnership Owned and controlled by two or more people Partners enter into an agreement Also quick and easy to start Share investments and profits If business fails, both partners are on the line for debts
In your notes…. Effective partners often compliment each other. One usually offers skills and abilities the other does not possess. Identify skills and abilities you might look for in a partner. Choose ones that will compliment your own.
Corporation Separate legal entity formed by documents file with the state Owned by one or more shareholders Managed by a board of directors More difficult to form, must meet more legal requirements Not all owners have a say in business functions Don’t have access to profits without board of director’s approval
In your notes….. Try not to look; see if you can quickly list the differences between the three main forms of business ownership.
With your neighbor…. Identify problems that can arise if a business attempts to change its’ form of business ownership. Create a quick list.
Computer Work… Please go to this website: www.sba.gov Go to the “Starting and Managing” tab Click on “Thinking about starting” Read at least two articles from this section. Take notes on the articles and write down the names of the ones you read We will discuss in class