Name: ________________________________________________________________________________
CHAPTER 8 – Business Organizations
Section 1 - Sole Proprietors
 Business organization (firm) –establishment formed to _________________________________________________
 _______________________________________,_______________________________________,
_______________________________________
 Sole Proprietor – business owned and _______________________________________________________________
 Most _________________________ type of business organization
 ___________ of all businesses are sole proprietorships in the U.S.
Section 2 – Partnership
 Partnership – a business organization owned by _______________________________________________________
______________________________________________________________________________________________
 Account for about _________% of all businesses
 General Partnership – partners share _______________________________________________________________
 Limited Partnership – partnership in which only _______________________________________________________
 Limited Liability Partnership – all partners are _______________________________________________________,
in the case of _______________________________________________________.
 Articles of Partnership – outline the ________________________________________________________________
Section 3 – Corporation
 Corporation – is a legal entity, or being, owned by _____________________________________________________
______________________________________________________________________________________________
 Stock – a certificate of _______________________________________________________
 Partial owner , i.e. ___________________, purchase 1, ____________________ owner of the company
 Corporation has a separate __________________________________, an entity separate
______________________________________________
 Account for _________% of all businesses, but _______________% of all products sold
 Closely held – privately held corporations ____________________________________________________________
 Publicly held – sells stock on the market ____________________________________________________________
Mergers
 Merger – combine with ___________________________________________________________________________
 Horizontal merger – firms in the ______________________________________________________________ merge
 Vertical merger – firms involved in producing ___________________________________________________ merge
 Conglomerates – business mergers _________________________________________________________________
 Multinationals – large corporation that ______________________________________________________________
Section 4 – Other Organizations
 Business Franchise – semi-independent business that __________________________________________________
 Business is granted right to sell ____________________________________________________________________
 Cooperative – Co-ops, business organization owned and operated by _____________________________________
_______________________________________________________
 Consumer cooperative – consumers sell _____________________________________________________________
 Book clubs, ___________________________________, etc.
 Service Cooperatives – provide a ___________________________________________________________________
 ______________ unions, banking services, ________________________, _______________________, etc.
 Producer cooperatives – agricultural marketing _______________________________________________________
 Nonprofit Organizations – business that gears towards _________________________________________________
 Professional Organizations – work to improve the _________________________, working
___________________________, and skill _______________________________________________________
 National Education Association, ______________________________________________, American Bar
Association for Lawyers, etc.
 Business Organization – promote the _______________________________________________________
 Better ________________________________________________
 Trade Associations – nonprofits that ________________________________________________________________
 Labor Unions – organized group of workers __________________________________________________________
Advantages and Disadvantages of Sole Proprietorship, pgs. 185 - 188
Advantages of Sole Proprietorships
Disadvantages of Sole Proprietorships
Ease of Start-Up ____________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Unlimited Personal Liability ___________________________
__________________________________________________
__________________________________________________
__________________________________________________
1. Authorization ___________________________________
______________________________________________
______________________________________________
2. Site Permit _____________________________________
______________________________________________
______________________________________________
3. Name _________________________________________
______________________________________________
______________________________________________
Limited Access to Resources __________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Relatively Few Regulations ___________________________
__________________________________________________
__________________________________________________
__________________________________________________
Zoning Laws _______________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Sole Receiver of Profit _______________________________
__________________________________________________
__________________________________________________
__________________________________________________
Full Control ________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Easy to Discontinue _________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Lack of Permanence _________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Lack of Fringe Benefits _______________________________
__________________________________________________
__________________________________________________
__________________________________________________
Advantages and Disadvantages of Partnerships, pgs. 190 -193
Advantages of Partnerships
Ease of Start-Up ____________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Articles of Partnership _______________________________
__________________________________________________
__________________________________________________
__________________________________________________
Uniform Partnership Act _____________________________
__________________________________________________
__________________________________________________
__________________________________________________
Disadvantages of Partnerships
Unlimited Liability __________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Potential for Conflict ________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Shared Decision-Making and Specialization
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Larger Pool of Capital________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Taxation __________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Advantages and Disadvantages of Corporations, pgs. 195 - 198
Advantages of Corporations
Disadvantages of Corporations
Advantages for Stockholders
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Articles for the Corporation
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Difficulty and Expense of Start-up
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Certificate of Incorporation
__________________________________________________
__________________________________________________
Includes:
1. _______________________________________________
2. ________________________________________________
3. ________________________________________________
4. ________________________________________________
5. ________________________________________________
6. ________________________________________________
7. ________________________________________________
Double Taxation ____________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Dividends _________________________________________
__________________________________________________
Loss of Control _____________________________________
__________________________________________________
__________________________________________________
__________________________________________________
More Regulation ____________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Advantages and Disadvantages of Franchises, pg. 202
Advantages of Franchises
Disadvantages of Franchises
Management Training and Support
__________________________________________________
__________________________________________________
__________________________________________________
High Franchising Fees and Royalties
__________________________________________________
__________________________________________________
__________________________________________________
Standardized Quality
__________________________________________________
__________________________________________________
__________________________________________________
Strict Operating Standards
__________________________________________________
__________________________________________________
__________________________________________________
National Advertising Programs
__________________________________________________
__________________________________________________
__________________________________________________
Purchasing Restrictions
__________________________________________________
__________________________________________________
__________________________________________________
Financial Assistance
__________________________________________________
__________________________________________________
__________________________________________________
Limited Product Line
__________________________________________________
__________________________________________________
__________________________________________________
Centralized Buying Power
__________________________________________________
__________________________________________________
__________________________________________________