Organization of BusinessSole ProprietorshipsPartnershipsCorporationsCooperativesPublic / Government Enterprises

Sole ProprietorshipsOne person owns & operates the businessMost common type of business organizationAppropriate for small market where good /

service is not mass produced (e.g. accounting, dentistry, engineering)

Sole ProprietorshipsAdvantages Disadvantages

Sole decision makerKeep all the profitsEasy to start

• Limited money (capital) to start investment

• No specialization which means a lot of work for owner

• Severe financial risk with unlimited liability

• Hard to attract workers looking for permanent work because long term future unsure

PartnershipsTwo or more people enter a business as

owners and share the profits / losses based upon an oral or written agreement specifying the money, skills, workload and authority of each partner

Commonly found in farming, the professions (e.g. law), restaurants, construction and repair work

PartnershipsAdvantages Disadvantages

More capital can be raised

Workload shared allowing for vacations & specialization

Sounder business decisions can be made

Partners can have disagreements

Unlimited liability for debt can hurt partner who is not responsible for poor business decisions

When one partner dies or leaves a new partnership agreement must be made

CorporationsHas an existence of its own separate from

those who created it or own itCrown-owned or controlled by the

government (e.g. CBC)Business-owned and controlled by private

individuals (e.g. Bell Canada Enterprises)

CorporationsWeaknesses of sole proprietorships and

partnerships led to corporations being formedStock Market is an organized market where

corporations can sell shares or ownership in their company

CorporationsAdvantages Disadvantages

Limited liability which means only personally liable for the amount of money you have invested in the company

Easier to raise capital for the business (e.g. retained earnings, securities like preferred & common shares, bonds)

Unaccountable management may act selfishly against the best interests of the shareholders

Management less motivated to be successful if they don’t have ownership stake in company

CorporationsAdvantages Disadvantages

LongevitySpecialization through

mass production

Expensive to establishDouble taxation

CooperativesOrganized with the aim of benefiting its

owners through lower prices and / or distribution of surpluses at the end of the year

Like a corporation with shares sold but unlike a corporation despite how many shares you own only one vote per person

CooperativesAdvantages Disadvantages

democratic and fair little motivation to work harder than others

Public / Government EnterprisesFederal, provincial, and municipal

governments produce a wide array of goods and services in Canada from garbage disposal to medical services

Crown corporations are semi-independent (e.g. Canada Post)

Public / Government EnterprisesProduces goods and services that are

essential to a community at a reasonable price

To reduce debt and inefficiency crown corporations have been sold off to the public i.e. privatization (e.g. Air Canada, 407)