Mr. Duggan/ Economics BUSINESS AND LABOR

SOLE PROPRIETORSHIPS Is a business owned and managed by a single individual

Advantages Ease of start up ( license, permit and name) Relatively few regulations (zoning laws) Sole receiver of profit (after taxes all profit) Full control Easy to discontinue

Disadvantages Unlimited personal liability- (legally tied for obligation of paying debts) Limited access to natural resources Lack of permanence (death, retirement and lack of Fringe benefits causes the business a limited life)

PARTNERSHIPS Business organization owned by two or more people

TYPES OF PARTNERSHIPS General partnership- share equally in both responsibility and liability Limited partnership- one partner runs the firms actions and the other invests the money Limited liability partnerships- all partners are limited where they are responsible for only certain parts of the business

ADVANTAGES OF PARTNERSHIPS Ease start up (documents for a partnership) Articles of partnerships- legal agreement Uniform Partnership Act-government laws for rules of partnership Shared decision making and specialization Larger pool of money Taxation (tax breaks)

DISADVANTAGES OF PARTNERSHIPS Unlimited liability- risk for one person bad mistake can destroy the company Potential for conflict

CORPORATIONS Is a legal entity, or being, owned by individual stockholders, each of whom faces limited liability for the firms debit Stock- a certificate of ownership in a corporation

TYPES OF CORPORATIONS Closely held corporation- privately held Publicly held corporation- stocks traded on open market

ADVANTAGES OF CORPORATION Limited liability for owners Transferable ownership Ability to attract capital Long life

DISADVANTAGES IF THE CORPORATION Expense and difficulty of start-up (need certificate of incorporation) Double taxation (dividends- pay outs to stockholders) Potential loss of control by the founders More legal requirements and regulations

CORPORATE COMBINATIONS Horizontal mergers- joining two or more firms in the same market providing the same good and services Vertical mergers- joining two or more firms involved in different stages of producing the same good or service Conglomerates- when firm owns more than three businesses that make unrelated products

MULTINATIONAL CORPORATION Firms that operate in more than one country at a time Advantages – provide jobs and products around the world Disadvantages- unduly influence the culture and politics in the countries in which they operate

BUSINESS FRANCHISES Semi independent business that pays fees to a parent company in return for the right to sell a certain product Advantages Management and training Standardized quality National advertising Financial assistance Centralized buying power

Disadvantages High franchising fees Strict operating standards Purchasing restrictions Limited product line

COOPERATIVE ORGANIZATIONS Consumer cooperatives (sell large quality of products at reduces prices) Service cooperatives (banking services, health care and baby sitting services) Producer cooperatives (farming markets that help each other sell their products)

NON PROFIT ORGANIZATIONS Are usually in the business of benefiting society