Chapter 8: Business Organizations
Section 1: Starting a Business
Getting Started
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People who decide to start a business and are willing to take risks are
_______________________________.
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Collect information about the _____________________, the _____________ of
____________________ for the product, and learn about taxes and laws relating to the
business.
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Federal and state ________________________________ offer help to small businesses.
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The __________________________ has a great deal of information to help
entrepreneurs.
Elements of Business Operation
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__________________________: wages, equipment, utility bills, rent, supplies, and
inventory
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__________________________________: information about your company and the
service/product you are selling
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__________________________________________: track all your expenses and income
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__________________: balancing the risk against the advantages of being self-employed
Section 2: Sole Proprietorships and Partnerships
Sole Proprietorships
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A business owned by one person, known as the ________________________________.
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The biggest advantage is that the owner receives all the ___________________ and has
full ______________ of the business.
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The biggest disadvantage is that the owner has ________________________________,
which means the owner is personally responsible for all debts and damages from doing
business.
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_________________________________________ may be seized to pay off business
debts.
Partnerships
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A business owned and operated by __________________________ people.
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Partners sign a legally binding agreement describing the _________________ of each
partner, division of __________________ and distribution of ____________________ at
end of partnership.
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The biggest advantage is that the partners share ___________________ and
___________________.
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The biggest disadvantage is the partners have ______________________________
_____________________________.
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______________________ partnerships are businesses in which the partners are not
equal.
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The general partner(s) is(are) fully responsible for ______________ of company.
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Other partners contribute money or property, but have no ____________________ in the
company’s management.
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The limited partners have no liability beyond their _______________________________.
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________________________________________ are temporary partnerships set up for a
specific purpose.
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The joint venture is dissolved after it has ___________________________________.
Section 3: The Corporate World and Franchises
Why Form a Corporation?
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The need for ______________________________________________________
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Wanting financial backers who will lend _______________ without having a
_______________ in the business.
What is a Corporation?
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An organization owned by many people but treated by law as if it were a
______________________.
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Corporations can own ____________________, pay taxes, make contracts, ___________
_______________________.
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Corporations have a distinct existence from ___________________________________.
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A major advantage is stockholders have ___________________________________
______________________, they are not personally responsible, only the business loses
money and assets.
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A major disadvantage is corporations pay more ________________ than other forms of
business organizations.
Corporate Structure
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____________________________ the corporation in the state where it will
headquartered.
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File the _________________________________________________________________
which include name, address and purpose of corporation; names, addresses of board of
directors; number of shares of stock to be issued; amount of money capital to be raised
through stock. of the business.
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State grants a corporate ________________________ that allows the corporation to
operate in that state
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Raise capital by selling _____________________ or ___________________.
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_________________________________ gives stockholders right to vote and a
percentage of future profits.
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__________________________________________ doesn’t give voting rights, but
guarantees a _______________________ and these stockholders have first claim on
assets left over if corporation goes out of business.
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Stockholders then elect a ___________________________________________________
who will supervise and control the corporation by hiring people to run the day-to-day
operations of the business.
Franchises
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A contract in which a __________________________________ sells to another business
the right to use its name and sell its product.
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The business buying it, the ____________________________________, pays a fee that
could include a percentage of all money taken in.
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Franchises often have __________________________________ to teach the franchisee
and to set the standards of business operations.