Chapter 2: Types of Businesses
 Forms of Business Ownership
Forms of business ownership and types of businesses describe how they are organized and
run. The four main forms of business ownership are listed below.
1)
2)
3)
4)
5)
_________________________________
_________________________________
_________________________________
_________________________________
____________* - is a combination, or ___________, of the four forms of
ownership.
Sole Proprietorships
o A sole proprietorship is a business owned by ______ person who is known as the
________________.
o The proprietor has a wide range of __________________ including arranging
displays and _______________ to customers to name a few.
o _______________ to run the business usually come from the owner’s
____________, friends, family, or from a ____________ loan.
o If the business prospers, the owner receives all of the _____________.
o If the business does poorly, the owner is responsible for its ___________. This is
called ____________________________________.
Partnerships
o A partnership refers to a type of business in which ___________ or more individuals
share the ___________ and _______________________ of owning and operating
it.
o The terms of the partnership are recorded in the
______________________________.
o The most common form of partnership is a ________________ partnership.
o When two individuals form a ______________ partnership, the partners are only
_________________ for the _______________ they both __________ in the
initial business. This is called __________________________________.
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Corporations
o A _____________ is a business granted legal status with rights, privileges and
____________ that are ________________ from those of the people who work for
the business.
o Corporations can be small such as a ___________________ or large such as a
____________________ that conducts business in several different countries.
o Small portions of corporate ownership that are owned publicly are called
______________or _______________.
o Individuals who own shares of a corporation are called _________________ and
become _____________ of the business.
o Shareholders have ____________ _______________.
o A board of________________ runs a corporation that is owned by
shareholders and make decisions on behalf of the shareholders.
o A publicly traded corporation that makes a profit may pay out
________________ to shareholders.
Types of Corporations
Private Corporations
 Only a _____ __________ control all the _____________, and therefore, the
business
 Shares are not listed for sale on a stock__________________ or trading market
where stocks are bought and sold. Examples: ___________________________
Public Corporations
 Raises money by making ____________ available to thousands of people through
selling shares on the ____________ ____________
 These individuals become the _______________ of the business
 People with only a few ______________ of stock have _____________ on a
company’s policies
Examples:
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Crown Corporations
 Operated by the ___________________ or _____________________ government
o Examples: __________________________________________________
_______________
Municipal Corporations
 The _________________ name of a city or town, to provide_____________ to the
local citizens
o Example: ___________________
Co-operative
• Is a business _____________ by the workers or _____________ who buy the
products or use the services that the business offers.
•
This type of business is motivated by ______________ and not ______________.
• Unlike a corporation, however, each member has only _____ vote, regardless of the
number of shares owned.
EXAMPLES:
IGA (Independent Grocers Alliance)
IDA (Independent Druggists Association)
MEC – Mountain Equipment Co-op
Franchises
In a franchise operation, one business, the ________________, _____________ the
rights to its _______________, operating ______________, _____________, and
business _____________________ to another business, the ______________________.
o A _____________________ can provide the franchisee with
o a ready made, fully operational business
o brand recognition that is appealing to consumers
o Requirements before a franchise is awarded may include
o paying the ______________
o agreeing to pay a _____________________ as well as any national or local
advertising costs
o purchasing all supplies __________________________
o participating in franchiser ___________________
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Going into Business
Eight Questions to Ask Before Going into Business
1. Why Start Your Own Business?
 People who desire to be __________ and ______________ for making decisions
often decide to _______________________.
 They believe it is the best way for them to achieve _____________________, to
allow them to use their ______________________________________.
2. What Different Types of Businesses Are There?




3. What Are Your Skills and Interests?
 Different ideas, skills, and knowledge can be used to start a new business.
 Two popular ones are ________________ or _________________ businesses.
1. Should Your Business Be Home-based?
o Technology has changed how SOHO (“__________________________”)
businesses operate. __________________, and ____________ are a few of
the tools that home office businesses use today to be successful.
2. Should Your Business be Web-based?
o E-commerce (“_____________________”) is a marketplace where consumers
and sellers meet _________________________.
o In the “real world,” products are tangible. Products and services are sold to us
by personal contact with the sellers.
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o In ____________________, we do not interact with products or come faceto-face with the sellers. Our experience with services is limited or non-existent.
o Consumers are often reluctant to purchase online due to _____________
______________________________________.
4. Where Can You Find Information About a Business?
 Businesses require ________ and _______ information to make good decisions.
 Important resources to find information include:
o ___________________________
o _____________________________
o _____________________________
o _____________________________
o ________________________ and provincial governments
 (i.e., Strategis and Statistics Canada are two helpful government sites or
agencies.)
5. What Are the Start-up Costs?
 Capital resources to run a business are available through __________________
referred to as _________________________ to run the business.
 Using your ________________________ called _____________________ is an
alternative way to fund a business.
6. What Level of Risk Can You Expect?
 Even with research and planning, business can be risky. __________ or ___________
beyond and within the owner’s control can put the business in ______________
difficulty.
7. What Steps Are Involved in Running This Business?
 Some types of businesses, such as manufacturing, are _______________.
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 A complex business requires _______________ with _________________ to
successfully start and operate it.
8. What Resources Will You Need?
 ______________________ is determining the resources the business requires and
how much financing it needs to obtain them.
 ____________________ is the amount of money gained from the sale of products
or services.
International Business Structures
A number of different business structures allow businesses to expand into international
markets.
Joint Ventures
 Two or more business owners form a _____________________ partnership for a
_______ that will benefit both parties.
 Can match the skills and expertise of two _____________ individuals or businesses
to generate more benefits for both parties.
International Franchises
 An __________________________ is a way to achieve an international presence by
buying the rights to a chain operation from the franchiser.
Strategic Alliances
 ____________________ occur when two or more businesses agree to commit
__________ ________________ to achieve a common set of objectives.
 Alliance partners remain ____________ and ________________________ of each
other.
 Usually make sense when the parties involved have complementary ______________.
Mergers
 _____________ happen when two or more companies join together:
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o One of the businesses usually wants to _________________________ in the
other company, or both businesses have ______________________.
Offshoring
 __________________ relocates some of a company’s operations to another country.
 Usually this happens to take advantage of:
o
o
o
Multinational Corporations
 A business enterprise that conducts business in ___________________ or
_____________ ____________________.
 A multinational corporation offers different benefits to the country it invests in.
o Some positive benefits include _____________________________.
o Negative consequences could be ____________ and more
_________________ for citizens of that country.
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