1. Understand marketing and business management 1

2. Apply knowledge of business ownership to establish and continue business operations. 2

3.  Sole Proprietorship  Partnership  Corporation  Cooperative  Franchise  Which type of ownership is the most common in the United States?  Which types of ownership counts for the most revenue in the United States? 3

4.  How many people own a sole proprietorship?  Who manages a sole proprietorship?  How are sole proprietorships formed? 4

5. ADVANTAGES FOR OWNER  Easy to form  Complete control of business  Recipient of 100% of the profit  One time taxation DISADVANTAGES FOR OWNER  Limited capital  Unlimited liability  Limited lifetime 5

6.  How is a sole proprietorship terminated?  What are some sources of funding that may be used for investment?  What are some local examples? 6

7.  How many people are considered for a partnership ownership?  Who manages a partnership?  How is a partnership formed? 7

8. ADVANTAGES FOR PARTNERS  Easy to form  More capital and credit available  Work load more evenly shared  Losses are also shared DISADVANTAGES FOR PARTNERS  Unlimited liability  Limited lifetime – if partner leaves or dies  Profits are shared  Decisions are made jointly  Hard to add other partners 8

9.  How is a partnership terminated?  What are some sources of funding that can be used for investments by partners?  What are some examples of partnerships? Can you name some local examples? 9

10.  Why would an investor choose a limited liability partnership?  Why would businesses choose to enter into a joint venture?  What is meant by the saying “by proof of existence”? 10

11. Type of Partner Participation in the Business Relationship to the Public Degree of Liability General*ActiveKnownUnlimited DormantNot activeUnknownUnlimited LimitedNot activeKnownLimited SecretActiveUnknownUnlimited SilentNot activeKnownUnlimited 11

12.  Who owns a corporation?  How is ownership determined?  Who manages a corporation?  How are corporations formed? 12

13. ADVANTAGES OF CORPORATIONS  Capital easy to obtain  Limited liability for shareholders  Can invest without having to manage day-to-day operations  Possibility of unlimited lifetime of business  Decision-making is shared DISADVANTAGES OF CORPORATIONS  Double taxation: profits and earnings  Subject to more laws than other types of ownership  More difficult to form  Operations controlled by shareholders and board of directors instead of original owner(s) Example: 10 years after founding Apple, Steve Jobs was fired by the board of directors. 13

14.  How is a corporation terminated?  What is the source of investment for corporations?  What are some examples? 14

15.  Consolidation: combining two or more firms through purchase, merger, or ownership transfer to form a new firm.  Expansion: a business strategy in which growth is obtained by increasing the number of stores in which customers can buy a company’s products and services.  Merger: Voluntary joining of two firms on roughly equal terms into one new legal entity. 15

16.  What is special about an S-corporation?  Why would a small business operate as an limited liability company (LLC)?  Who benefits from services of a nonprofit corporation? 16

17. Franchise: a written contract granting permission to operate a business to sell products and services in a set way. Business-format franchise: a franchising arrangement where the franchisor provides the franchisee with an established business, including name and trademark, for the franchisee to run separately. Product trade-name franchise: a franchising agreement where manufacturers allow retailers to distribute products and use names and trademarks. 17