1. Forms of Business Organizations
Chapter 3 Section 1

2. Sole Proprietorships (or Proprietorships)
The most common form of business in the US
One person owns and operates the business
It is the easiest business to set up
Only licenses and the fees associated are required
Can be run by most any means
Internet
Store front
Yard work
Etc…

3. Partnerships Business jointly owned by two or more people
General Partnerships
All partners are responsible for operations and management
Limited Partnership
At least one partner is not active in the operations of the business but has contributed financially
Limited liability: limited partner is only responsible for investments into the company

4. Partnerships continued
Partnerships can take many different forms, including the same forms of a proprietorship

5. Corporations Has the same legal rights as an individual
Can buy and sell property
Can enter into contracts
Can be sued
Make up over 90% of all US sales
Examples: Exxon Mobil, Chevron, Microsoft, General Electric, Wal-Mart, Johnson and Johnson, AT & T, IBM,
Air Fraga’s will be on this list soon. Very soon!!

6. Corporations (continued)
Must apply to receive a Charter from the state
This gives the company legal rights to incorporate
Shareholders buy Stocks in the corporation
These shareholders are owners and only responsible for the money they invested to buy the stocks. (Shareholders cannot be sued).

7. Air Fraga’s Business Organization
Which organization would be best for AF’s?
Why?
What would be the biggest Disadvantage?

8. Real Life Goal Scenarios
Open an establishment with two friends
All three put in the same amount of money
All three manage equally
What type of organization is this?
General Partnership
What if one of the partners only gives money and shares in the profits?
Limited Partnership