1. Business Organizations
Miss Smith
7th grade Civics
*pgs

2. Sole Proprietorships A small business owned by one person Pros Cons
You’re your own boss
You decide the business hours
You take all the profits
Must have or borrow $$ to get a building/office space/equipment
Must have $$ to pay employees
Responsible for taxes
Risk failure and debt
What are some examples of sole proprietorships? Hair salons, drug stores, gas stations

3. Partnership
A business in which two or more people share the responsibilities, costs, profits, and losses
Why do you think some small business owners might set up a partnership instead of running the business as a sole proprietor? Less responsibility, more capital to start business

4. Corporations
A type of business that is recognized as a separate legal entity from the people who own it
A permanent organization (unlike proprietorships and partnerships)

5. How Corporations Function
Raising Money
Selling stock (or shares of ownership)
The people who buy corporate stocks are stockholders
Dividends are stockholders’ share of the profits

6. How Corporations Function
Rights to Operate
Certain laws must be followed to incorporate a business
Incorporation allows a company to sell stocks

7. How Corporations Function
Elected Directors
Corporations must have meetings where stockholders can:
Elect a board of directors
Voice their opinions on how the company is structured
The board of directors represents the stockholders when making decisions about the company

8. How Corporations Function
Choosing Executives
This is done by the board of directors
Debt Responsibility
If it goes out of business, to pay off debt, property will be sold

9. Nonprofit Organizations
Organizations that provide goods and services without seeking to earn a profit for stockholders
Ex: charities, research associations, educational programs