1. Business Forms

2.  Industry: Group of one or more firms that produce identical or similar products.  Ex:  Business Firm: company, enterprise, and business all refer to an organization controlled by sing management.  See Graph.

3. Sole Proprietorship  Business owned by one person.  Receives all profits and responsible for all debt. Ex.:  Liabilities: Debts or obligations owed to others Claims made against the firms assets  Account for 72% of all business firms and generate only 5% of all business revenue.

4. Partnership  Business owned by 2+ people who share ownership.  Legally binding partnerships clarify the amount of time and energy spent. Ex.:  Account for 8% of all business firms and generate only 12% of all business revenue.

5. Corporation  Business organization managed on behalf of its owners, who provide the funds. Charter: document that states nature of the business, the initial owners of the stock, and the types of stocks to be sold.  Stockholders: Corporations fund initial start-up and expansion by selling stock (share in company).

6. Corporations  Board of Directors: Stockholders elect policymakers. Owners are responsible to directors and directors are responsible to stockholders.  Annual Corporation Report: Once/year directors issue a financial status report to stockholders.  Account for 20% of all business firms and generate 83% of all revenues.

7. Special Business Types  S Corporation: Small business enjoys corporation advantages without paying corporate income taxes (avoid double taxation).  Stockholders pay personal income taxes based on dividends received. Can not have more than 35 stockholders and may not own 80% of another corporation.

8. Special Business Types  Limited Liability Companies (LLC): Combines advantages of corporation and partnership.  Must have 2 or more members who own interest in the LLC and function as partners.  Member liability is limited because of corp.  Members are taxed as partners.  Property is held in name of LLC not names of members.

9. Special Business Types  Not-for-Profit Corporations: Don’t try to earn a profit (not subject to income tax), but serve educational, social, charitable, or religious purpose.  Income includes: money from private foundations, govt. funding, and individual donations.  Cooperatives(Co-ops): Associations of companies that perform functions for members.  Housing  Consumer  Producer

10. Special Business Types  Government-Owned Corporations: Federal, state, and local owned and operated.  Generally when market doesn’t supply need for g/s.  Ex.: U.S. Postal Service, transit services, electric utilities etc.

11. Special Business Types  Franchises: Method of distributing products or services that is governed by a contract.  License that entitles holder to operate individually owned business as if it were part of a large chain of stores.  Ex.: Subway, Dairy Queen, Radio Shack etc.