Type of Business Organization - Mr. Knoche's Civics
Types of Business Organization KEY (How Businesses are Owned, p.384-385)
|Type of Business Organization |(Sole) Proprietorship |Partnership |Corporation |
|Definition |A form of business |A form of business |A form of business |
|[pic] |organization with one owner who takes |organization with two or more owners |organization that is authorized by |
| |all the risks and keeps all the |who share the risks and the profits. |law to act as a legal entity |
| |profits. | |regardless of the number of owners. |
| | | |Owners share the profits. Owner |
| | | |liability is limited to the amount of|
| | | |their investment. |
|Elaboration |- owned by one person |- two or more people | |
|(add some details from |- small business |share ownership | |
|reading) |- entrepreneur |- agreement, contract | |
| |- most common |- usually small | |
|Advantages |- you are your own |- share the risk |- little risk for each investor |
|[pic] |boss | |(stockholder) |
| |- make all the decisions |-both provide money, |-can grow large |
| |- get all the profits |ideas, talents, work |- efficient |
|Disadvantages |- must supply all money |- must be able to |- takes a lot of |
|[pic] |- work many hours |work & get along |money to start |
| |- owner takes all the |with your partner |- stockholders are |
| |risk |- decisions are made |not very involved |
| | |jointly | |
|Examples | | | |
|(name some real businesses | | | |
|that you know) | | | |
|Illustration | | | |
|(draw a picture or cartoon | | | |
|including words & symbols to | | | |
|show the main ideas of that | | | |
|type of business) | | | |
An ___entrepreneur_______ is a person who takes a risk in starting a business.
Which type of business would he or she most likely start? Proprietorship or partnership
Why?
Stock is a portion of ownership in a business. Stockholders give the corporation some of their own money because they expect that in the future the business will increase in value and earn a good profit. Then the stockholders receive dividends (a percentage of the profit) or they can sell the stock at a higher price than they originally paid and make a profit that way.
Think of a something that others may not value much right now, but you predict will increase in worth in the future. If you could buy stock in that, you would be an investor.
What is your idea for investing in?__________________________________
Why?
Vocabulary – Exclusions
One word or phrase in each group does not belong. Find the word and cross it out. Then write a sentence that tells how the other words are alike.
1. turns an idea into a product ______________________________________________
takes risks
stocks ______________________________________________
can succeed or fail
2. two or more people _____________________________________________________
have a contract
stockholders _____________________________________________________
share expenses and profits
3. one owner ________________________________________________
most common business
shared risk ________________________________________________
easy to start
4. low taxes _________________________________________________
owned by stockholders
produces goods and services efficiently _____________________________________
hires others to work
Vocabulary –Matching
Match each term with the correct description.
_____ 1. corporation a. a business owned by one individual
_____ 2. nonprofit organization b. charities and cultural programs
_____ 3. partnership c. legal responsibility for something, costs or damages
_____ 4. sole proprietorship d. shares of ownership in a business
_____ 5. stocks e. business owned by two or more individuals
_____ 6. liability f. licensed by state governments & owned by shareholders
Identification -- Categorizing
Write the appropriate letter for the type of business in each scenario below.
S - sole proprietorship P - partnership C – corporation
_____ 1. Lindsey and Charlie own a driving school together called “The Right Turn.”
_____ 2. Mrs. Denson wins the lottery, and opens her own coffee shop.
_____ 3. Facebook is popular and gets a license from the state to sell Facebook stock.
_____ 4. Mr. Krabs is the owner of The Krusty Krab.
_____ 5. Napoleon likes tater tots, so he invests $50.00 to buy shares of Ore-Ida.
_____ 6. Tim Tebow, LeBron James, and Gabby Douglass open a sporting goods store together.
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