1. Chapter 8: Business & Labor
Business Organization: an establishment formed to carry on commercial enterprise
Sole Proprietorship: a business owned and managed by a single individual

2. Advantages of a Sole Proprietorship
Ease of Start Up
Relatively Few Regulations
Sole Receiver of Profit
Full Control
Easy to discontinue

3. Disadvantages of Sole Proprietorships
Unlimited Personal Liability
Limited Access to Resources
Lack of Permanence

4. Partnerships
Partnership: a business owned by 2 or more persons who agree on a specific division of responsibilities and profits
General Partnership: partners share equally
Limited Partnership: only one partner is required to be the general partner
Ex-NY Yankees, Oakland Raiders

5. Partnerships cont…
Limited Liability Partnerships: All partners are limited partners
Articles of Partnership: a partnership agreement
UPA: Uniform Partnership Act-orders common ownership interests, profit and loss sharing and shared management responsibilities

6. Advantages Ease of start up Shared Decision Making Specialization
Larger Pool of Capital
Tax Breaks

7. Disadvantages
Unlimited Liability
Potential for conflict

9. Big Time Business

10. Corporation: a legal entity owned by stock holders
Stock: certificate of ownership in a corporation
Closely Held Corporation: issues stock only to a few people, often family members
Publicly Held Corporation: sells stock on the open market

11. Advantages of Incorporating
Limited Liability
Transferred Ownership
Ability to attract capital
Long Life

12. Advantages to Stock Holders
Limited Liability
Profit

13. Mergers
Horizontal Mergers: two or more firms in the same market combine; ex-Daimler and Chrysler
Vertical Mergers: two or more firms involved in different stages of producing the same good or service.
Ex-Carnegie Steel, drives the suppliers out of business because they produce their own

15. Conglomerates
Business combination merging more than three businesses that make unrelated products

16. Multinationals
Large corps that market and sell their products all around the world.

17. Franchises
Franchises

19. Advantages of Franchises
Management Training and Support
Standardized Quality
National Advertising Programs
Financial Assistance
Centralized Buying Power

20. Disadvantages of Franchises
High Fees
Royalties
Strict operating Standards
Purchasing Restrictions
Limited Product Line

21. Cooperative Organizations
Cooperative: a business organization owned and operated by a group of individuals for their shared benefit
aka-co-ops

22. Consumer Co-Ops
: retail outlets that are owned and operated by consumers
Goods are sold to the members at discounted prices
Goods are bought in bulk
Members work to maintain their discounts

23. Service Co-Ops
Credit Unions

24. Nonprofit Organizations
YMCA
American Red Cross
Churches
Hospitals
Synagogues

25. Professional Organizations
AMA-doctors
AVA-vets
Bar Association-lawyers
Business Associations-Better Business Bureau
Labor Unions: AFL-CIO, Teamsters

26. Assign P P P P