CAREER AND FINANCIAL MANAGEMENT Business Organization

 Most large business start with a single person or as a partnership  This is due to the high start up cost and uncertainty if the business will be successful

Sole Proprietorship  Sole Proprietorship- a business that is owned by one person. The owner is responsible for all debts (losses) and liabilities.  Liability- a legal obligation

Partnership  Multiple people (2 or more) equally share the responsibilities of a business.  Still responsible for all debts  Share profits equally  Share responsibility for all liability.

Corporation  Most common form of business organization. In this model the owners have limited liability.  Limited Liability- the owners cannot loose more than they have invested. (Private company)  Stocks- separates the corporation from its owners being personally liability for legal issues (being sued)

Franchise  A well established business that has a successful product or service that is willing to expand by “selling” individual stores to individuals or partnerships.  Stores must following guidelines from parent company  Ensures all store are the same and consistent  Individual stores must pay a percentage of profits to parent company  Individual stores must buy all supplies from parent company

Franchise (con’t)  Examples  Many restaurants- McDonalds, Subway, Dunkin Donuts, Dominos,  Gas Stations-