warmup do you know anyone who owns their own business? describe what they do
TRANSCRIPT
Warmup
Do you know anyone who owns their own business? Describe what they do.
Unit IIIBusiness and Labor
Part I – Types of Business
Sole Proprietorship single owner – most common
form of business in USAdvantages
1. Owner makes all decisions
2. Keep all the profits
3. No corporate income tax
4. Easiest to set up
Disadvantages1. Not an expert in all areas
2. Responsible for all mistakes
3. Unlimited Liability responsible for all debts, personal property can be taken
4. Hard to raise capital (money)
Partnership Two or more owners
Advantages1. Can raise more capital
2. Share in responsibility
3. No corporate income tax
Disadvantages1. Unlimited Liability responsible for all debts,
personal property can be taken
2. Share decision making
3. Share profits
4. More complicated to set up than sole proprietorship
CorporationCompany is owned by people
who buy its’ stockAdvantages
1. Can raise a lot more capital ($) through sale of stocks and bonds
2. Decisions are made by professionals
3. Limited Liability only responsible for how much you have invested
4. Earns the most money in US
Disadvantages1. Have little say in how the company is run
2. Only share in portion of profit
3. Most complicated to set up
4. Corporate Income Tax
Business Types and Profits
TypesSole Proprietorships = 72%
Corporations = 20%
Partnerships = 8%
EarningsCorporations = 83%
Partnerships = 12%
Sole Proprietorships = 5%
How are corporations established?
Charter: government permission to organize a corporation
Stock:
shares in the company sold to the public
Who owns a corporation?
Stockholders
How are corporations run?
Owners = Stockholders who elect the
Board of Directors who select the
President who hires
VP of Sales VP of ProductionVP of Finance
What other types of business organizations are there?
Non-Profit Organizations Businesses that are not out for
profitExamplesCooperatives
Nonprofit organization of people set up to carry out an economic activity
Franchise
Individuals buy right to use a corporations name and product
Warmup
How did Andrew Carnegie respond when workers at his steel mill went on strike?