1. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 1 BUSINESS LAW BUSINESS OWNERSHIP

2. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 3 TYPES OF BUSINESS OWNERSHIP ●Sole Proprietorship- 1 owner Example: Duncan’s Landscape (small business) ●Partnership- 2 or more owners Example: Law office of Smith & Williams ●Corporation- A legal entity where the owners are shareholders (stock ownership) Example: Apple, Wal-Mart

3. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 (3 types of ownership, advantages/ disadvantages/legal documents) Sole Proprietorship Advantage- 100% profit, easy to start Disadvantage- 100% liability & risk, long hours Legal Docs: Assumed Name Certificate, SS# or Tax ID Partnership Advantage- shared responsibility and risk Disadvantage- shared profits Legal Docs: Partnership Agreement, Tax ID Corporation- Advantage – limited liability, more resources Disadvantage- double taxation, limited profits Legal Docs: Corporate Resolution, Articles of Incorporation, Tax ID

4. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 3 TYPES OF BUSINESS OWNERSHIP Sole Proprietorship- Unlimited Liability- Owner is 100% responsible for the business Partnership- Partnership Agreement- Legal Document that defines the details of each partner Corporation- Articles of Incorporation- Legal documents that defines the details of the corporation. Stock- shares of ownership in a corporation Limited Liability- The risk is limited to your investment.

5. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Forms of Ownership U.S. Business Comparison by Form of Ownership Form of Ownership Number of Businesses (2006) Total Revenue (Thousands) Percent of All Businesses Percent of Total Revenue Proprietorship22,075,0001,278,000,00071.53%4.06% Corporation5,841,00026,070,000,00018.93%82.82% Partnership2,947,0004,131,000,0009.55%13.12% Total30,863,00031,479,000,000100.00%

6. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Checkpoint ●Which form of business ownership is the most complex and difficult to form? ●The corporation is more complex to begin than other business forms. ●Forming a corporation requires much more bureaucracy, is more subject to government regulations, requires the organization of a board, and must have clearly defined bylaws.

7. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Checkpoint ●What are the other specialized forms of business ownership? ●Limited liability partnership ●Joint venture ●S corporation ●Limited liability company (LLC) ●Nonprofit corporation

8. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 ONLINE RESEARCH Research 3 Organizations (Governmental or Private) that protects consumers, workers, or for a certain cause. Many corporations are non-profit and are design to support a cause.