1. 31.1 b a c kn e x t h o m e Chapter 31 Objectives  Discuss the differences in setting up a sole proprietorship, a partnership, and a corporation.  Explain the most important disadvantages of sole proprietorships and partnerships.  Give two reasons why the corporate form of business organization is important. © 2002 West Educational PublishingTo accompany Law for Business, 14e, by Ashcroft and Ashcroft

2. 31.2 b a c kn e x t h o m e  What are some advantages of a sole proprietorship?  What are some disadvantages of a sole proprietorship?  What are some personal traits you think a sole proprietor should have to be successful in business? Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Sole Proprietorship

3. 31.3 b a c kn e x t h o m e Partnerships Partnerships must:  Consist of two or more people.  Operate the business lawfully for a profit.

4. 31.4 b a c kn e x t h o m e Types of Partners  General, or ordinary, partnerships place no limitations upon a partner’s rights, duties, or liabilities.  Limited partners are liable up to the amount of their investment.  Trading partnerships buy and sell merchandise. Non-trading partnerships provide services.

5. 31.5 b a c kn e x t h o m e Kinds of Partners  Describe each of the following types of limited partnerships:  Silent  Secret  Dormant  Nominal  What are some advantages of a partnership? Some disadvantages?  What is the difference between a joint- stock company and a joint venture? Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz

6. 31.6 b a c kn e x t h o m e Corporations  A corporation exists because of law, not just because of individuals who want it.  A corporation may operate for profit or not-for-profit, but must be for legal purposes.  Corporations allow for the following:  Pooling of capital from many investors.  Limited liability.