1. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Managing the Form of Business Ownership 10.1 10.1 Entrepreneurs and Proprietorships 10.2 10.2 Partnerships 10.3 10.3 Corporate Forms of Business Ownership 10.4 10.4 Specialized Types of Organizations CHAPTER 10

2. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Characteristics of Entrepreneurs ● Entrepreneur- A person who starts, manages, and owns a business ● Intrapreneur- An employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service 2 CHAPTER 10

3. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Planning a Business ● Business plan- written document that describes the nature of the business, its goals and objectives, and how they will be achieved ● Forms of ownership ● Proprietorships ● Partnerships ● Corporations 3 CHAPTER 10

4. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Nature of Proprietorships ● Management issues of (sole) proprietorships ● Self management ● Relationship management ● Speed of decision making ● Freedom from red tape ● Liability ● Businesses suited to proprietorship- personal services types of businesses ● Part-time proprietorships 4 CHAPTER 10

5. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Nature of Partnerships ● Partnership—a business owned by two or more people. ● Partnership agreement—a written agreement between two or more people identifying how the partners will add capital, labor, or other assets and divide any profits 5 CHAPTER 10

6. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Management Issues of Partnerships ● Expanded management input ● Capital ● Efficiency ● Tax advantages ● Liability ● Agreement between partners ● Uncertain life ● Division of profits 6 CHAPTER 10

7. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Limited Partnerships ● Limited partnership—partnership with at least one general partner who has unlimited liability and at least one limited partner whose liability is limited to his or her investment. 7 CHAPTER 10

8. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Businesses Suited to Partnership ● More than one kind of product or service ● More than one location ● Extended operating hours ● Professional services 8 CHAPTER 10

9. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Structure of Corporations ● Basic features ● Stockholders ● Directors ● Officers ● Close and open corporations (Privately Held vs Publicly traded) 9 CHAPTER 10

10. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Formation of Corporations ● Preparing the certificate of incorporation ● Stating the purpose of the business ● Investing in the business ● Paying incorporation costs ● Operating the new corporation ● Getting organized ● Handling voting rights 10 CHAPTER 10

11. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Management Issues for Corporations ● Sources of capital ● Limited liability ● Permanency of existence ● Ease in transferring ownership ● Taxation ● Government regulations and reports ● Stockholders’ records ● Charter restrictions ● Agency dilemma 11 CHAPTER 10