1. Introduction to Business Chapter 6 Pages 89, 94-98
Business Structures

2. Three Major Types of Business Ownership
Sole Proprietorship
Partnership
Corporation

3. Sole Proprietorship Business owned by one person
More than 2/3 of U.S. businesses are operated as this
Sole proprietor has complete responsibility for all business decisions

4. Partnership
Owned and managed by a small group, often not more than two or three people
Share profits and losses and have unlimited liability for the debts of their business
Articles of Partnership is drawn up by a lawyer/attorney (see page 94 in the book)

6. Corporation Owned by a number of people
Operated under written permission from the state in which it is located; called certificate of incorporation
Corporation acts as a single individual on behalf of its owners
Owners are shareholders or stockholders

7. Corporation Corporation is a legal entity Board of Directors
guide the operations of a
corporation
(see page 97 in the book)
Each owner receives a
profit from the corporation,
otherwise known as the dividend
A legal entity is when the business’ existence and life are separate from the owners.
Dividend is calculated the following way:
1. Profit divided among the owners
2. Profit divided by # of shares, which equals the profit for each share
3. Profit for each share multiplied by the number of shares each owner owns

8. Advantages & Disadvantages
Sole Proprietorship
Partnership
Corporation
See page 99 in the book!
If you were to start a business which kind would it be? Why?

9. Non-Profit Corporation
AKA- Municipality or Municipal Corporation
Incorporated towns- Mt Horeb, Middleton
Their own police, schools, fire department
Uses the money from taxes to provide services
Non-Profit Organizations
-The Red Cross
- DECA

10. Franchise
Defined: Written contract granting permission to sell someone else’s product or service in a prescribed manner, over a certain period of time and in a specified territory
Can be operated as a sole proprietorship, partnership or corporation

11. Franchise Franchisor Easy business to start
Franchisee
person or group of people who received the franchise from a parent company
Franchisor
parent company granting the franchise
Easy business to start
Usually requires a large investment of capital to start

12. Cooperative
Owned by the members it serves and is managed in their interest
Consumer’s Cooperative
Producer’s Cooperative
Formation must be approved by the state
May sell one or more shares of stock to each of its members
Board of directors may be chosen