1. Bell Ringer Chap. 3 Sect 1
List 3 advantages of a sole proprietorship. (Pg. 59)
List 2 Disadvantages of a partnership. (Pg. 62)

2. Business Organizations

3. 3 Forms of Business Organization
Sole Proprietorship
Partnership
Corporation

4. Sole Proprietorship A business owned by one person
Most common organization in the U.S.
Most profitable but smallest.

5. Sole Proprietorship Advantages: Disadvantages: Easy to start up
Easy to manage
100% of profit
No business taxes
Own boss
Easy to get out
Disadvantages:
Unlimited Liability
Difficult raising financial capital
Size and efficiency
Little experience
Difficult attracting employees
Limited life

6. Partnership Business owned by 2 or more people.
Least numerous form of business organization.
General Partnership-All partners responsible.
Limited Partnership-At least one partner is not active in daily operation.

7. Partnership Advantages: Disadvantages: Easy to set up Easy to manage
Lack of taxes
Easier to attract financial capital
More efficient
Easy to attract top talent
Disadvantages:
All partners responsible (general partnership only)
Limited life
Conflict between partners
Share profits

8. Corporations
Business organization recognized as a separate legal entity have all the rights of an individual.
Account for 90% of all sales in the U.S.

9. How is a corporation formed?
Apply to federal or state government for a charter.
Stock (pieces of the company) sold to shareholders.

10. Corporate Structure
Common Stock= basic ownership with 1 vote per share.
Preferred Stock= non voting ownership. Get paid before common stock owners.
Board of Directors= elected to set policies and goals.
See Chart on page 64.

11. Corporations Advantages: Disadvantages Easy to raise capital
Board can hire professional managers
Limited liability
Unlimited life
Easy to transfer ownership
Disadvantages
Difficult to start
Shareholders have little say
Double taxation
More government regulation