Business Organizations
TYPES OF BUSINESS
ORGANIZATIONS
1. PROPRIETORSHIP- one
owner
(most common/ easiest to
enter)
2. PARTNERSHIP- two or
more owners
(least common/
professionals)
3. CORPORATIONstockholders
(makes most $/ toughest to
enter (charter)
Sole Proprietorship
• Easy to Start
• Unlimited Liability
• Exclusive Profit
• Sole Responsibility
• Needs CollateralLimited Growth
Potential
• Full Control
• Lacks Longevity
Partnership
•
•
•
•
•
•
•
•
Easy to Start
Can Specialize
Shared Decisionmaking
Shared Losses
Unlimited Liability
Potential for Conflict
Lacks Longevity
Corporation
Easy to raise Capitalbut tough guidelines
to sell stock
Difficult to Form
Limited Liability
Taxed Twice
Profits are Divided
Last longer than its
founders.
Owners are separate
from managers.
Sweet Opportunities
Instructions
• Make a recommendation about what form
of business organization you think is best
for each client.
• State the reasons for your position. There
will also be some disadvantages to the
business form you choose.
• Identify at least one negative and suggest
how you might minimize it.
SWEET
OPPORTUNITIES
GROUP WORK
ANSWER KEY
Client #1
• Client 1: Elise MacMillan and her brother Evan
co-founded The Chocolate Farm in Englewood,
Colorado, in the late 1990s.
• They formed a partnership and won so many
awards they eventually had to shut down part of
their website because they couldn’t fill the
orders. They hired about 10 people to work for
them.
Client # 2
• Client 2: Milton Hershey broke ground for his
chocolate factory near Lancaster, PA in 1903. It
was the beginning of what would become
Hershey Foods Corporation .
Client # 3
• Client 3: Forest Mars invited Bruce Murrie,
an investment banker and son of the
Hershey company president, to be his
partner in M&M Ltd. The M&Ms we still eat
today were first sold to the public in 1941.
The letters in "M&M" stand for Mars &
Murrie. Eventually, Murrie left the business
but Forest Mars became the owner of
Mars, Inc.
Client # 4
• Client 4: Wally Amos launched the
Famous Amos Cookie Company in a
Hollywood, CA storefront on Sunset
Boulevard in 1975.
Diversification
• Both Hershey Foods and Mars have purchased
manufacturers of other chocolate candy bar
brands and non-chocolate candies. Hershey
used to sell cocoa mulch, a byproduct of the
chocolate making process, to gardeners, but no
longer does. Mars has a history in the pet food
business. Other Mars ventures include hot and
cold drink vending machines.
• Famous Amos Cookies changed hands several
times between 1985 and 1998, eventually being
purchased by Keebler Foods. Keebler was
acquired by Kellogg Company in 2001, helping
expand what is viewed as a cereal company into
the snack foods market as well.
Summarizer
sole proprietorship
corporation
partnership