1. Journal Entry If you could own any business….
What business would you own?
Why?
Would you own it alone?
Would you own it with a partner?
Would your partner be a friend? Family member?

2. Forms of Business Ownership

3. Evaluation Criteria Tax consideration Liability exposure
Start-up and future capital requirement
Control
Managerial ability
Business goals
Management succession plans
Cost of formation

4. Sole Proprietorship
A business owned and managed by one individual; the business and the owner are one and the same in the eyes of the law

5. Sole Proprietorship Advantages Simple to create Least costly form
Profit incentive
Total decision-making
No special legal restrictions
Easy to discontinue

6. Sole Proprietorship Disadvantages Unlimited personal liability
Limited skills and abilities
Feelings of isolation
Limited access to capital

7. Partnership
An association of two or more people who co- own a business for the purpose of making a profit

8. Partnership Advantages Easy to establish Complementary skills
Division of profits
Larger pool of capital
Ability to attract limited partners
Little governmental regulation
Flexibility

9. Partnership Disadvantages Unlimited liability of at least one
Difficulty in disposing of interest
Lack of continuity
Potential for personality and authority conflicts
Partners bound by law of agency

10. Corporations
A business that is owned by stockholders and that has legal rights and responsibilities as if it were a person.

11. Corporations Advantages Limited liability of stockholders
Ability to attract capital
Ability to continue indefinitely
Transferable ownership

12. Corporations Disadvantages Cost and time in incorporating
Double taxation
Legal requirements and red tape
Potential loss of control

13. Franchise
Is the right or license to sell a company’s product or service at a designated location
Involves:
franchisor: a business which leases its trade name and operating system to another person
franchisee: person or persons who pay fees to a company to operate a business under the franchisor’s trade name

14. Advantages Include: assistance from parent company name recognition
parent company shares experiences and proven techniques
name recognition
McDonalds®
Sherwin Williams®
shared advertising expenses

15. Disadvantages Include: high purchase fees
percentage of sales or yearly fee paid to parent company
must follow parent company business structure

16. Partner activity!
Client 1: Elise MacMillan and her brother Evan co-founded The Chocolate Farm in Englewood, Colorado, in the late 1990s.
Client 2: Milton Hershey broke ground for his chocolate factory near Lancaster, PA in It was the beginning of what would become Hershey Foods Corporation .
Client 3: Forest Mars invited Bruce Murrie, an investment banker and son of the Hershey company president, to be his partner in M&M Ltd. The M&Ms we still eat today were first sold to the public in The letters in "M&M" stand for Mars & Murrie. Eventually, Murrie left the business but Forest Mars became the owner of Mars, Inc. 
Client 4: Wally Amos launched the Famous Amos Cookie Company in a Hollywood, CA storefront on Sunset Boulevard in 1975.

17. Answer the following Questions:
What has happened to the founder of the business?
Is he or she still involved with the company?
What other things has he or she done?
Who owns the business?
How has the business changed?
Has the company been involved in any mergers or acquisitions?
What products does the company sell?
What made this company so successful?