Loudoun County Public Schools / Overview



Entrepreneurs and business organizationsName: ____________________ Class: ________Date: ___________sole proprietorship:A sole proprietorship is a business owned and operated by ______________________.Usually the proprietor (aka the owner) supervises the business directly.Most businesses in the U.S. have this kind of business organization (_______ of all businesses, in fact).How to start a sole proprietorship:1. Register the name of your business.2. Check and comply with federal, state and local regulations.3. ______________________________________________.4. Keep records and prepare tax forms.sole proprietorship:AdvantagesDisadvantagesFew restrictions and regulations for most.Full profits and individual taxation (does not have to pay corporate tax)Unlimited liability- paying all debt of company (exception limited liability companies)Full responsibility Limited growth potential Partnership:Business owned by two or more.Co-owners share profits and liability.Usually signed agreement.i.e. family owned, small stores, farms, medical practices, law firms, financial firms.Two types of partnerships: General - is a form of business in which all co-owners have unlimited liability for any business debts.Limited - _____________________________________________________________________________.GeneralDisadvantagesCo-owners share liability All are active in business operations Share financial resources and skills to businessPartners contribute capital to the frim and receive a portion of the company’s profits.DO NOT participate in day to day operations. i.e. silent partner – Limited LiabilityPartnership: AdvantagesDisadvantagesRelative ease to start pFew restrictions and regulationsShared decision makingSpecialization – Unlimited liability for general partners.Possibility of conflict between partnersContinuity issues – Corporation:A corporation is a company treated under the law as a single body with its own powers, separate from its owners. Its owners are shareholders who purchase shares of company stock.It can acquire resources, own assets, produce and sell products, incur debts, lend money, and sue and be sued.There are two kinds of corporation: ______________ (aka closely-held) corporations and _____________ corporationsAdvantagesDisadvantagesLimited LiabilityGrowth potential – Much higher than other kinds of business.Raise funds by issuing bonds.Professional managementLonger lifeComplex and expensive start upLoss of controlGovernment regulationDouble taxation – tax on profits and dividends.Multinational corporations:Multinational corporations are corporations which operate in more than one country.Some have very few employees, others have very manyTheir headquarters is ____________________________________________________________________________________________________________________________________________________________They enjoy many advantages: access to more markets, less risk because of ability to operate in more than one country, and ability to tap cheaper labor and raw materials than in just one country.Franchise:In a business franchise, a parent company grants to an independent business owner the exclusive right to use its trade name and sell its products in a designated location.In return, the franchisee makes an initial payment and must make other payments (royalties) periodically.The franchisee must also fellow other protocols connected with the trade name.What are some examples of a Franchise?Cooperative:A cooperative is a business that is owned and operated by a group of individuals for their shared benefit.As a rule, cooperatives are non-profit businesses. They exist in order to provide their members with affordable goods and services.Food co-ops, housing cooperatives, and discount price clubs are examples of cooperatives._____________________________________________________________________ are all cooperativesNonprofit Organization:These organizations are established in order to support some particular public or private goals.In many respects, they function much like other businesses except that they do not operate in order to make a profit.They can be organized as corporations, cooperatives, trusts, or foundations.The Red Cross and Doctors Without Borders are examples of non-profits.Rights of a business:The right to make __________The right to enter into contractsThe right to advertise.The right to screen employees.The right to be fairly compensated for property. The Fifth Amendment, for example, prohibits the government from taking property (via eminent domain) without paying a fair price for it.The right to protect intellectual property via patents, trademarks, copyrights, etc.Responsibilities of a businessObtaining those licenses and permits required by law.Paying all taxes that apply to their business.Dealing honestly with customers and suppliers.Honoring contracts.Creating an equal opportunity workplace.Ensuring product safety. ................
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