1. Chapter 8-1
Forms of Business

2. Legal forms of business
Sole Proprietorship: business owned by one person
72% of business = 5% of sales
Partnership: two or more people that own & operate the business w/an agreement
General and limited
8% of business = 11% of sales
Corporation: a legal entity distinct from its owners
20% of business = 84% of sales

3. Stocks and Bonds STOCK = a share in the ownership of a corporation
--common stock = anyone & voting rights
--preferred or private stock = selected & non-voting
BOND = an IOU
You get your money back + interest

4. Sole Proprietorship Advantages Disadvantages Easy to set up
**Own boss**
Profit = income
Incentive to operate efficiently
Do not have to pay separate income tax
Easy to get out
Disadvantages
Financial resources are limited
Profit = income
Responsible for all management
**Subject to unlimited liability**
Limited life