Types of Business Organization
Type of Business
Sole
Organization
Proprietorship
Partnership
Definition
A form of business
organization with one
owner who takes all the
risks and keeps all the
profits.
A form of business
organization with two
or more owners who
share the risks and
the profits.
Elaboration
- small businesses
- entrepreneur
- most common type
- agreement, contract
- usually small
- law firms, medical
groups,…
- share the risk
-both provide money,
ideas, talents, work
(add some details from
reading)
KEY
Corporation
(How Businesses are Owned, p.384-385)
Advantages
- you are your own
boss
- make all the decisions
- get all the profits
Disadvantages
- must supply all money
- work many hours
- owner takes all the
risk
- must be able to
work & get along
with your partner
- decisions are made
jointly
A form of business
organization that is
authorized by law to
act as a legal entity
regardless of the
number of owners.
Owners share the
profits. Owner liability
is limited to the amount
of their investment.
- little risk for each
investor (stockholder)
-can grow large
- efficient
- takes a lot of money
to start
- stockholders are
not very involved
Examples
(name some real
businesses that you
know)
Illustration
(draw a picture or
cartoon including
words & symbols to
show the main ideas of
that type of business)
An __entrepreneur____ is a person who takes a risk in starting a business.
Which type of business would he or she most likely start? _Sole proprietorship or partnership_
Why? They are usually the easiest to start.
Stock is a portion of ownership in a business. Stockholders give the corporation some of their
own money because they expect that in the future the business will increase in value and earn a
good profit. Then the stockholders receive dividends (a percentage of the profit) or they can sell
the stock at a higher price than they originally paid and make a profit that way.
Think of a something that others may not value much right now, but you predict will increase in
worth in the future. If you could buy stock in that, you would be an investor.
What is your idea for investing in?__________________________________
Why?
Types of Business Organization
Type of Business
Sole
Organization
Proprietorship
(How Businesses are Owned, p.384-385)
Partnership
Corporation
Definition
Elaboration
(add some details from
reading)
Advantages
Disadvantages
Examples
(name some real
businesses that you
know)
Illustration
(draw a picture or
cartoon including
words & symbols to
show the main ideas of
that type of business)
An ________________________ is a person who takes a risk in starting a business.
Which type of business would he or she most likely start? __________________________
Why?
Stock is a portion of ownership in a business. Stockholders give the corporation some of their
own money because they expect that in the future the business will increase in value and earn a
good profit. Then the stockholders receive dividends (a percentage of the profit) or they can sell
the stock at a higher price than they originally paid and make a profit that way.
Think of a something that others may not value much right now, but you predict will increase in
worth in the future. If you could buy stock in that, you would be an investor.
What is your idea for investing in?__________________________________
Why?
Vocabulary – Exclusions
One word or phrase in each group does not belong. Find the word and cross it out. Then write a
sentence that tells how the other words are alike.
1. turns an idea into a product ______________________________________________
takes risks
stocks
______________________________________________
can succeed or fail
2. two or more people _____________________________________________________
have a contract
stockholders
_____________________________________________________
share expenses and profits
3. one owner
most common business
shared risk
easy to start
________________________________________________
________________________________________________
4. low taxes
_________________________________________________
owned by stockholders
produces goods and services efficiently _____________________________________
hires others to work
Vocabulary –Matching
Match each term with the correct description.
_____ 1. corporation
_____ 2. nonprofit organization
_____ 3. partnership
_____ 4. sole proprietorship
_____ 5. stocks
_____ 6. liability
a. a business owned by one individual
b. charities and cultural programs
c. legal responsibility for something, costs or damages
d. shares of ownership in a business
e. business owned by two or more individuals
f. licensed by state governments & owned by
shareholders
Identification -- Categorizing
Write the appropriate letter for the type of business in each scenario below.
S - sole proprietorship
P - partnership
C – corporation
_____ 1. Barack and Hillary own a coffee shop together called “He said/She said.”
_____ 2. Mr. Bowyer wins the lottery, and opens his own Harley Davidson shop.
_____ 3. Best Buy is popular and gets a license from the state to sell Best Buy stock.
_____ 4. Mr. Krabs is the owner of The Krusty Krab.
_____ 5. Napoleon likes tater tots, so he invests $50.00 to buy shares of Ore-Ida.
_____ 6. Tiger Woods, Tom Brady, and Venus Williams open a sporting goods store
together.
1. turns an idea into a product _______________describes entrepreneur_______
takes risks
stocks
________________________________________
can succeed or fail
2. two or more people _______describes partnership_________
have a contract
stockholders
________________________________________
share expenses and profits
3. one owner
most common business
shared risk
easy to start
________describes sole proprietorship________
____________________________________
4. low taxes
____________describes corporation________
owned by stockholders
produces goods and services efficiently __________ __________________
hires others to work
Vocabulary –Matching
Match each term with the correct description.
__F_ 1. corporation
__B_ 2. nonprofit organization
__E_ 3. partnership
__A_ 4. sole proprietorship
__D_ 5. stocks
__C_ 6. liability
a. a business owned by one individual
b. charities and cultural programs often are examples
c. legal responsibility for something, costs or damages
d. shares of ownership in a business
e. business owned by two or more individuals
f. licensed by state governments & owned by
shareholders
Identification -- Categorizing
Write the appropriate letter for the type of business in each scenario below.
S - sole proprietorship
P - partnership
C – corporation
__P___ 1. Barack and Hillary own a coffee shop together called “He said/She said.”
__S___ 2. Mr. Bowyer wins the lottery, and opens his own Harley Davidson shop.
__C___ 3. Best Buy is popular and gets a license from the state to sell Best Buy stock.
__S___ 4. Mr. Krabs is the owner of The Krusty Krab.
__C___ 5. Napoleon likes tater tots, so he invests $50.00 to buy shares of Ore-Ida.
__P___ 6. Tiger Woods, Tom Brady, and Venus Williams open a sporting goods store
together.