1. Forms of Business

2. Sole Proprietor Definition: Owned & operated by 1 person
Unique characteristics:
Highest risk of failure of any form
of business
Most common form in US

3. Advantages of sole proprietorship
Low start up capital
Quick decision making & total control
Complete liability
Easy to form & few legal hurdles
All profits
High personal satisfaction

4. Disadvantages of sole proprietorship
Lack of longevity
Limited life
Unlimited liability
Limited growth potential
Sole responsibility

5. Partnership Definition: Owned & controlled by 2 or more people
Unique characteristics:
General partner: daily operations
Limited partner: finances, silent partner
Fewest in number

6. Advantages of Partnerships
Low startup capital
Shared decision making
Shared liability based on type
Easy to form
Few legal hurdles
Shared losses & high personal
satisfaction

7. Disadvantages of Partnerships
Risky due to conflicts & trust issues
Shared profits
Lack of longevity
Limited lifespan
General: unlimited liability
Limited: limited liability

8. Corporations
Definition: owned by stockholders & treated by law as an individual
Unique characteristics:
Publicly owned or closed
Earns greatest % of sales

9. Advantages of Corporations
Easy to raise capital
Specialization through division of labor
Limited liability
Longevity/unlimited life
Profits to shareholders
Satisfaction irrelevant

10. Disadvantages of Corporations
Profits are taxed twice
Corporate tax
Personal tax
Lack of personal satisfaction
Very slow decision making
Complex setup & many legal considerations

11. WHAT’S NEXT?
STAGES IN THE PRODUCTION PROCESS!