1. Definition: An organization that produces or sells goods or services to satisfy the needs, wants, and demands of consumers for the purpose of making a profit.

3. There Are Several Different Business Structures There Are Many Factors To Consider Selection Of A Business Structure Should Be Based Upon Adequate Information The Decision Should Be Made After Weighing All Considerations

4. Choosing the Best Business Ownership

5. 1.How easy is it to set up, manage, operate and liquidate? 2.Taxation - What are the tax advantages and disadvantages? 3.Asset Protection - What are your potential legal liabilities? 4.Fringe Benefits - What can the company provide & deduct? 5.Estate Planning - What happens to the business at ones death? Choosing the Best Business Ownership Issues/Questions to Ask:

7. Choosing the Best Business Ownership Sole Proprietorship -> is a business owned and operated by one person for profit 1.Simple and inexpensive to create and operate. 2.Owner reports profit or loss on his or her personal tax return. 3.Easy to liquidate. 1.Owner personally liable for business debts. 2.Business ends with death of owner. Main AdvantagesMain DrawbacksType of Entity

8. -> Easiest Form of Business to Set Up and Operate 1.No formal process. 2.Obtain all necessary federal, provincial and local licenses and permits. 3.Register Assumed Name Certificate (if necessary). 4.Obtain Employer Identification Number (if necessary).

9. Assumed Name Certificate General rule - if the business (e.g., sole proprietorship & general partnership) is conducted under an assumed name (a name other than the surname of the individual (s)), an assumed name certificate should be filed or registers in the region that the business plans to operate.

10. Example: Sole Proprietor Hair Salon Auto Repair Shop Barber Shop Corner Variety Store Doctor Contractor Book keeper Dog walker Artist Actor Fisherman Taxi Driver

13. -> has at least one general partner and one or more partners who have limited liability who are not involved in management and decision-making 1.Limited partners have limited personal liability for business debts as long as they don't participate in management. 2.General partners can raise cash without involving outside investors in management of business. Type of Entity Main AdvantagesMain Drawbacks 1.General partners personally liable for business debts. 2.More expensive to create than general partnership. 3.Suitable mainly for companies that invest in real estate.

14. 1.Cross between a partnership and a corporation, with mostly partnership characteristics. 2.Tax advantages of a partnership. 3.Limited liability of a corporation. 1.Owners have limited personal liability for business debts even if they participate in management. 2.Profit or loss can be allocated differently than ownership interests. 3.Moderately easy to liquidate. Main AdvantagesMain Drawbacks 1.More expensive to create than partnership or sole proprietorship. 2.May or may not terminate upon death or withdrawal of member. 3.Cannot have more than two of the four characteristics of a corporation. Type of Entity

15. -> two or more individuals who contribute money, labor, and skill to a business, and who share in its profits, losses, and management. 1.Simple and inexpensive to create and operate. 2.Owners (partners) report their share of profit or loss on their personal tax Returns. 3.Easy to liquidate. 1.Owners (partners) personally liable for business debts. 2.Terminates upon death or withdrawal of partner, unless there is a partnership agreement to the contrary. Type of Entity Main AdvantagesMain Drawbacks

16. Example: Partnership Accounting Firm Law Firm

18. 1.Formed under Federal or Provincial laws. 2.Legally it is treated as an artificial person, distinct from the individuals who own it. 1. The most complex form of business to set up and operate. 2. Monitored by federal, provincial and local agencies. 3. Profits may be subject to double taxation. 4. Limited legal liability. 5. Business continues after death of owner/transferability of shares. 6. Difficult and expensive to liquidate AttributesMain Drawbacks 1.More expensive to create than partnership or sole proprietorship. 2.Paperwork can seem burdensome to some owners. 3.Separate taxable entity. Type of Entity

19. Example: Corporation General Motors Ford Motor Company Bell Canada Inc. Rogers Cable Inc. Dofasco Inc. Stelco Inc. Home Depot Inc. Rona Inc. Petro Canada Inc. Royal Dutch Shell Inc. Cineplex Odeon Inc. Coca Cola Inc.

21. 1.Owned by its members. 2.All members get one vote. 3.Members elect a board of directors. 1.Lower costs of goods or services. 2.Set up is easy and inexpensive. Main AdvantagesMain Drawbacks 1.Members diverse needs or wants can lead to difficulty in the decision making process. Type of Entity

22. Example: Cooperatives Mountain Equipment Co-op The Co-Operators Group Inc. Arctic Co-operatives Ltd. Calgary Co-op. CoopeTarrazú

24. 1.One business licenses another to use its name, operating procedure and so on. 2.As a hybrid, can have any form of ownership. 1.Association with a well established brand, reputation and product or service. 2.Assistance with site selection, lease negotiation, site development, builders and shop fitters. Main AdvantagesMain Drawbacks 1.Less autonomy in some business decisions. 2.Restricted territory in which you may operate and or promote your product Type of Entity

25. Example: Franchises Pizza Hut Arby’s. Derry Queen. Subway. KFC. Tim Hortons.