[go: up one dir, main page]
Scribd
Upload
50 views17 pages

7.00 Understand Marketing and Business Management

This document discusses different types of business ownership including sole proprietorships, partnerships, corporations, and franchises. Sole proprietorships are owned and run by one person while partnerships are owned by two or more people through a written agreement. Corporations are owned by shareholders and managed by a board of directors. Franchises involve a parent company granting another business the right to operate using their products and services in a set way. The document outlines advantages and disadvantages of each type as well as terms related to corporations.

Uploaded by

Mei Ying
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
50 views17 pages

7.00 Understand Marketing and Business Management

This document discusses different types of business ownership including sole proprietorships, partnerships, corporations, and franchises. Sole proprietorships are owned and run by one person while partnerships are owned by two or more people through a written agreement. Corporations are owned by shareholders and managed by a board of directors. Franchises involve a parent company granting another business the right to operate using their products and services in a set way. The document outlines advantages and disadvantages of each type as well as terms related to corporations.

Uploaded by

Mei Ying
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 17

7.

00 Understand marketing and


business management.
7.02 Apply knowledge of business
ownership to establish and continue
business operations.
Business Ownership

• Sole Proprietorship
• Partnership
• Corporation
• Franchise
Sole proprietorship

• A business owned and run by one person


• The business is typically managed by the
owner.
• Formation varies by state.
Advantages

• Easy to start up
• Complete control of the business
• Owner receives all the profits
• Limited taxes (one time taxation)
Disadvantages

• Limited capital (money)


• Unlimited liability (responsible for ALL debt)
• The business is limited to the lifetime of the
owner
Partnership

• A business owned and controlled by two or


more people who have entered a written
agreement
• The management of the company depends on
the partnership agreement.
Advantages

• More capital and credit available than a sole


proprietorship
• Combined resources (money, expertise)
• Shared management responsibilities
• Shared risk
• Work load easier to manage than a sole
proprietorship
Disadvantages

• Profits are shared


• Responsible for each others decisions
• Potential for disagreement among partners
• Unlimited liability (depending on type)
Types of Partnerships

• Limited Liability Partnership


– Identifies some investors who cannot lose more
than the amount of their investment
– Investors are not allowed to participate in the day-
to-day business management
• General Partnerships – a partner plays an
active role and has unlimited liability (every
partnership must have at least one general
partner).
Corporations

• An organization owned by one or more


shareholders and managed by a board of
directors.
• Ownership
– Determined by purchase of stock
– A stockholder, or shareholder, owns a ‘piece’ of the
company
– One share of common stock equals one vote
Advantages
• Easier to obtain capital
• Limited liability for shareholders
• Life of the corporation is unlimited
Disadvantages

• Double taxation (profits and earnings)


• Government regulations and legal restrictions
• Decision-making shared among managers,
board of directors, and shareholders
Specialized Corporations

• Subchapter S (S-corporation)
– treats partners as individuals by taxing them once
• Limited Liability Company
– Provides limited liability protection for owners
• Nonprofit corporation
– A group of people who join to do some activity
that benefits the public
Corporation Terms
• MERGER: Two individual businesses that combine to
form one organization
• CONSOLIDATION: A form of business growth in which
a corporation acquires many smaller companies
• EXPANSION: A business strategy in which growth is
obtained by increasing the number of stores in which
customers can buy a company's products and
services.
Types of Corporations continued

• Public-established for a governmental purposes


Examples
• National Science Foundation
• Export-Import Bank of the United States
• Private-established by individuals for business
or charitable purposes.
Examples
• Enterprise Rent-A-Car
• American Cancer Society

15
Franchise
• Permission to operate a business to sell
products and services in a set way
• Begins with a parent company who owns the
product or service and grants the right to
another business
• Franchiser: the company that owns the
product
• Franchisee: the company purchasing the right
to run the business
Types of Franchises
• Business-format
– Requires franchisee to sell products or service in a
specific format

• Product trade-name
– Allows franchisee to sell specific products. This
format is usually formed by automobile, appliance,
and petroleum product

You might also like