Chapter 19 Section 1

Proprietorships  Sole Proprietorship- A business owned and operated by a sole or single person. Advantage- Full pride in the owning the business receives all profits. Disadvantage- Unlimited liability/ Full responsibility Also difficult to raise financial capital (money needed to run a business or enable it to grow larger)

Partnerships  Partnership- A business that two or more people own and operate.  Structure. Articles of Partnership- The document identifies how much money each of you will contribute and what role partner will play in business. Advantage- Pride in ownership, ability to borrow, diverse talents, and efficient operations. Disadvantage- Legal structure is complicated and unlimited liability.

Corporations  Corporation- an organized business recognized by law that has many rights and responsibilities of the individual.  Structure. Charter- A government document granting permission to organize. - The Charter also specifies the amount stock, or ownership shares of the corporation that will be issued.

Corporations Continued - The people who buy this stock- the stockholders- become part owners of the corporation. - The stockholders elect a board of directors to act on their behalf. - Advantage- Ease in raising financial capital and growth - Disadvantage- Expensive and complex to set up, very little say, more regulated from the government.

Other Forms of Business  Franchise- owner is the only seller of a certain product in the right area. Owner pays a fee to the supplier for that right  Non Profit organization  Goods and services without trying to make a profit  Public Schools  Public Hospitals  Labor Unions  Boy Scouts/Girl Scouts

 Cooperatives- A voluntary association of people formed to carry on an economic activity. - Consumer cooperatives buy bulk amounts of goods on behalf of their members. Members donate time to run the operation to keep cost down OMI

PartnershipBoth Sole Proprietorship