Note Taking Guide
Topic 4014
Business Types
Nick Thompson
4 Types of Business Structures
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Sole Proprietorship
Partnership
Cooperatives
Corporations
Sole Proprietorship
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Controlled and owned and operated by ______________
Can buy or start business
Profits are used as owner sees fit
Business built by ______________________
Sole Proprietorship Advantages
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Low Start up cost
Tax advantages to _______________________
In direct control of business
Minimal working capital requirements
Little government Regulation
Profits go to _______________________
Sole Proprietorship Disadvantages
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Difficult to raise capital without incurring large debt
Owner is _______ financially liable
Partnership
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Controlled and owned and operated by ______________________
Can buy or start business
Profits are used as agreed upon by ___________
Business built by ____________
Partnership Advantages
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Partnerships are ______________
Start up costs are ________
Limited government regulation
More management = better decisions
Some tax advantages
_____________ source of capital
Partnership Disadvantages
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Partners are 100% financially liable
Difficult to find partners that easily cooperate
Limited ability to raise capital
______________________________ may cause confusion with management
decisions, employees, etc.
Corporations
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Owned by the Stockholders
Operated by the _________________
Profits are used as dividends to stockholders or as reserves for operations
Business built by _____________________
Corporation Advantages
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Specialized management =Greater efficiency
Easy to raise ______________
Specific privileges, rights and regulations
Ownership can be transferred
Tax advantages
Limited ________________
Corporation Disadvantages
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Very _____________ to organize
_______________ by government
Less personal management = lower employee loyalty & output
Can be _________________
Cooperative
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Organized by associates who become owner/members
State Charter required to start cooperative
_____________ by state law (around 8%)
Members do business through cooperative (group advantage)
Cooperative Differences
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Buys and sells primarily to it’s ______________
Co-ops sometimes exempt from antitrust regulations
____________ buy government
Often _________ buy other members of the business community
Recap
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4 Business types- Cooperative Corporations Partnership Sole Proprietorship
Each serves specific purpose and has advantages and disadvantages
All are used for specific purpose, all work well for different types of enterprises