Unit 1 Business in a Changing World

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Unit 1Business in a Changing World
Objective 1.3 Evaluate the role of different ty
pes of business and the various forms of business
ownership in the United States
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Types of Business Ownerships

• Sole Proprietorships
• Partnerships
• Corporations

• Franchise
• Cooperative
• Non-Profit Corporation

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Sole Proprietorship

• A business owned by one person
• Most are small firms
• The owner has complete responsibility for all
  business decisions
  
• In most cases the owner works in the firm.

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Examples of a Sole Proprietorship

• Jewelry Stores
• Restaurants
• Gas Stations
• Hair-Styling Salons

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Partnerships

• A business owned and managed by a small group,
  often no more that 2 or 3 people
  
• Partnerships are formed by written agreement
• Profit and Losses are shared by the partners.
  They also assume unlimited liability for the
  debts of their business.

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Examples of Partnerships

• Ben Jerrys
• My Three Sons Moving Company
• Law Firms
• Some Doctors Offices

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Corporation

• A business owned by a number of people and
  operated under written permission from the state
  in which it is located.
  
• The state grants a written permission called a
  certificate of incorporation.
  
• The corporation acts as a single individual on
  behalf of its owners.

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Corporations Continued

• People can be come part owner of a corporation by
  buying shares of stock.
  
• When shares of stock are purchased the buyer is
  referred to as a Shareholder or Stockholder.
  
• Many corporations have very few owners, but most
  corporations have many owners.

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Corporations Continued

• Large Corporations have millions of owners
• - For example IBM, Microsoft, Texaco and
  GM
  
• Corporations are responsible for most Mining,
  Manufacturing and Transporting of Goods.
  
• - For example DHL, UPS, Weyerhaeuser
• Most Super Stores and Department Stores are
  corporations.
  
• - Wal-Mart, Target, Belks, JCPennys

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Franchises

• A Franchise is a written contract granting
  permission to sell someone elses product or
  service in a prescribed manner, for a certain
  period of time.
• Franchises can be operated as a proprietorship,
  partnership or corporation.
  

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Franchises Continued

• A Franchisee is a person or group of people who
  receives the franchise from the parent company to
  sell it product or service.
  
• - For Example McDonalds, Subway, Wendys
• A Franchisor is when the parent company retains
  ownership of the business but allows additional
  chains to be opened.
  
• - For Example Best Buy, Wal-Mart, Sears

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Franchise Agreement

• The business must be ran a certain way.
• The name, product, design and color must remain
  the same.
  
• The prices, products, services and uniforms are
  determined by the parent company.
  
• The Franchisor agrees to the Franchisee get their
  business started.
  
• The Franchisor receives a percentage of all sales
  made by the Franchisee.

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Cooperatives

• Is owned by the members it serves and is managed
  in their interest.
  
• Formations of Cooperatives must be approved by
  the state it is located in.
  
• Two Main Types are
• - Consumer Cooperatives
• - Producers Cooperative

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Consumer Cooperatives

• Is an organization of consumers who buy goods
  and services more cheaply together than each
  person could individually.
  

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Producers Cooperative

• A Farmers Organization that markets products
  such as fruits, vegetables, milk and grain.

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Non-Profit Corporations

• Operate to provide a service, but not for
  profit.
  
• Most operate under the Corporate Organizational
  Formation.
  
• - Examples American Red Cross, Boy Scouts of
  America, Future Business Leaders of America

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Objective 1.3 - Review
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Review

• What are the 4 major types of Business
  Ownerships?
  
• How shares of stock does it take to own a part of
  a corporation?
  
• A shareholder is also known as a _________.

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Review Continued

• What is the easiest type of business to start?
• What is the most difficult type of business to
  start?
  
• What is the difference between a Franchise, a
  Franchisee and a Franchisor?