BUSINESS ORGANIZATIONS

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BUSINESS ORGANIZATIONS
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Sole Proprietorships

• A business owned and operated by one person.
• ADVANTAGES
• Ease of Start-up
• Full Control
• Exclusive right to profits

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Sole Proprietorships

• DISADVANTAGES
• Unlimited Liability
• Sole Responsibility
• Limited growth potential
• Lack of longevity

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Partnerships

• Business owned and operated by two or more
  people.
• General Partnership
• -Partners share decision making and have
  unlimited liability.
• Limited Partnership
• -Partners join as investors, providing financial
  capital for a share in the profits.
• -They dont make business decisions and their
  liability is equal to their investment.

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Partnerships

• Advantages
• -Ease of Start up
• -Specialization
• -Shared decision making
• -Shared business losses

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Partnerships

• Disadvantages
• -Unlimited Liability
• -Potential for conflict
• -Lack of Longevity

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Corporations

• Businesses that are publicly traded and financed
  by stock holders
• Advantages
• -Benefits for Stockholders
• -limited liability
• -Benefits for Corporations
• -limited liability for founders
• -separation of ownership and management
• -people who do not know about a particular
  discipline can still fund the venture.
• -Ease of raising financial capital
• -Longevity

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Corporations

• Disadvantages
• -Corporate Issues
• -Difficult Expensive to obtain a corporate
  charter.
• -Government regulates corporations much more
  closely.
• -Slow decision making process.

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Corporate Combinations

• Horizontal Combination -
• Merger between two or more companies producing
  the same good or service
• Vertical Combination -
• Merger between two or more companies involved in
  different production phases of the same good or
  service.
• Conglomerate Combination -
• A merger of companies producing unrelated
  products.

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In groups of 3-4..

• You must develop a Partnership.
• Outline an overview of your business (1 page)
• Include
• -Type of business
• -Is it a General or Limited Partnership
• Who makes the decisions?
• -How will you fund/take liability for your
  business
• -Who will do exactly what job
• HOW WILL PROFITS BE DIVIDED
• MAKE YOUR BUSINESS AS REALISTIC AS POSSIBLE -
  SOMETHING YOU WOULD ACTUALLY WANT TO BE INVOLVED
  IN!