Making the Market Economy
Work: Business and the
Entrepreneur
“Types of Business Ownership”
Sole Proprietorship: 70%
• Single owner
• Owner has complete control of the
business
• Owns all profits & suffers all losses
• Owner is PERSONALLY RESPONSIBLE
for all business debts and actions –
“liability”
• Might be difficult to raise capital
(money) to operate the business
Partnership: 10 %
• A business with two or more owners
• Partners can raise more financial capital
• There is shared risk, so if the business
fails, all partners share losses
• Partners may have different expertise
• Profits are shared
• Liability is still unlimited so all partners are
responsible
• Sometimes partners disagree and a
partnership is difficult to dissolve
Corporations: 20%
• A company chartered by the state and owned by
stockholders.
• The stockholders are represented by a board of
directors
• Stockholders are only liable for company actions and
debts to the amount invested – this is limited
liability
• It is easy to raise capital
• It is easy to transfer ownership - all you have to
do is sell the stock
• Corporations are subject to government regulation
• Individual stockholders have little say in company
operations
• Corporations are also taxed significantly – because
profits are taxed.
• Profits are “dividends”
Sweet Opportunities
• Read the client stories.
• Prepare a recommendation for which
form of business organization you think
is best for each.
• State the reasons why – positives
• Acknowledge one negative and how the
client can minimize its effects
Sweet Success!
• Client 1: Gertrude Hawk
• Client 2: Hershey Foods Corporation
• Client 3: Mars, Inc.
• Client 4: Famous Amos Cookie Company