1. We will begin Chapter 7 “Business Organizations” today.
Bell Ringer #1 – 11/15/10
We will begin Chapter 7 “Business Organizations” today.
In your notebook, list 5 independent (non-chain) businesses in your community.
List 5 “chain” or national companies to which you give business.

2. Sole Proprietorship
A business owned and controlled by one person (self-employed)
The oldest, simplest, and most common type of business organization
Ex: House cleaner, plumber, lawyer, carpenter, hairstylist, farmer

3. Sole Proprietorship ADVANTAGES
Easy start-up, require small amounts of $$
Full control
Exclusive rights to profits
DISADVANTAGES
Liability
Sole responsibility
Limited growth potential
Lack of longevity

4. Zoning Laws
Zoning Laws – specify areas of a city where various types of business activities can be pursued.
Proprietorships must observe zoning laws, and some don’t allow for home businesses.

5. Liability
Liability is a debt obligation; proprietors have unlimited liability (responsibility) for business debts
Owners of failed businesses may have to sell personal belongings in order to pay back tough debts

6. Collateral
Banks or lenders often require sole proprietors to put up collateral - item of value that a borrower agrees to give up if he/she is not able to repay a loan
Ex: The business itself, their house, car, personal possessions
Ms. Maher requires collateral when borrowing a pen or pencil

7. Homework Read Ch 7, Sn 1 (pgs 145-149)
Complete questions 1, 2, & 3ab on page 149.
Due Wed 11/17