SOLE PROPRITORSHIP
Business that is organized by one single owner.
Positives
• Easiest type to organize
• Owner has the power to
make decisions
• Profit does not have to be
shared
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Negatives
Unlimited liability – owner is
responsible for all debts
Limited capital – only have
your financial resources
Limited life – if owner dies,
business must be
reorganized
Employees hard to attract
PARTNERSHIP
A legal joining of two or more individuals in a business.
The least common form of business organization. Formed by a legal
agreement called the articles of partnership.
Positives
• Additional financial capital
• Can share expensive startup costs
• Each partner brings specific
talents
Negatives
• Unlimited liability –
financially responsible for
personal as well as business
debts of partners
• Limited life – if partner
dies, must reorganize
• Legal structure is
complicated
CORPORATION
A business recognized by law: rights & responsibilities of an individual;
own property, pay taxes, sue or be sued. Corporations are formed
through a charter granted by the government.
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Positives
Raise $ through the sale of
stocks/bonds
Limited liability – only
responsible for what you
invest in company
Professional managers
Unlimited life – many
professionals involved,
business does not need to
be reorganized
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Negatives
Expensive & complex to
start
Owners have little
control/decision making
Government
regulation/corporate income
taxes
Most difficult to organize
NON-PROFIT ORGANIZATION
An organization that operates like a business to support its members.
• Structured much like a corporation, but do not operate for a
profit.
• Non-profits seek to provide a service to its members, or the
community in general.
• Examples – Churches, YMCA, State Employees Credit Union
TYPES OF WORKERS
• Blue-Collar Worker – category of workers employed in
crafts, manufacturing, and non-farm labor.
• White-Collar Worker – category of workers employed in
offices, sales, or professional positions.
• Agricultural Worker – category of workers involved in farm
labor.
Categories of Skill
• Unskilled Worker – people whose job requires no specialized
training.
• Semi-skilled Worker – people whose job requires some
training in job-related skills, often modern technology.
• Skilled Worker – people who has learned a trade or craft
either through a vocational school or as an apprentice.
• Professional – highly educated individuals with college degrees
and usually additional training.
LABOR UNIONS
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Purpose – organized to improve wages and working conditions for its
members.
History – Labor unions became prevalent during the early 1900’s as
the industrial revolution changed the US economy.
Unions were instrumental in improving working conditions in
factories, working hours, wages, and creating child labor laws.
Recently labor unions have seen a decline in membership because of
the decline in blue collar jobs in the US, and the movement of
manufacturing jobs overseas.
Examples
Craft Union – union made up of skilled workers in a specific trade or
industry.
Industrial Union – union made up of all workers in an industry
regardless of job or skill level.
AFL-CIO – American Federation of Labor – Congress of Industrial
Organizations. Organization that combined Craft and Industrial
unions.
LABOR UNIONS (2)
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Levels of Organized Labor (Labor Unions)
Local Union – members of a union in a factory, company, or
geographic area.
National Union – Individual industrial or craft unions that
represent local unions nationwide.
Federation – (AFL-CIO) – represents 13 million people in US
and other countries.
Types of Union Agreements
Closed Shop – workers had to belong to the union in order to
be hired by a company. (Taft-Hartley Act 1947 – illegal)
Union Shop – must join union after being hired. (States can
ban)
Right-to-Work-Laws – States laws preventing unions from
forcing workers to join.
Federal Regulation – National Labor Relations Board
COLLECTIVE BARGAINING
• Collective Bargaining – process by which union and company
meet to discuss the terms of worker’s contracts.
• Mediation – 3rd party brought in to help reach an agreement;
not forced decision.
• Arbitration – 3rd party listens to both sides and makes a
final decision.
• Strike – workers in union refuse to work until demands are
met.
• Picketing – workers carry signs outside business to alert
public of issues workers have with the company.
• Boycott – workers urge public to refuse to purchase goods or
services due to worker treatment.
• Lockout – company blocks workers from entering building until
workers agree to a contract.