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Business organizations

Business organizations. Chapter 3. Types of business organizations. Sole Proprietorships Partnerships Corporations. Sole Proprietorships. A business owned and run by one person Easy to start Just need to pay business licenses and fees Example: Opening up your own restaurant.

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Business organizations

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  1. Business organizations Chapter 3

  2. Types of business organizations • Sole Proprietorships • Partnerships • Corporations

  3. Sole Proprietorships • A business owned and run by one person • Easy to start • Just need to pay business licenses and fees • Example: • Opening up yourown restaurant

  4. Sole Proprietorship: Advantages • Easy to start and manage • Easy to leave business • Don’t have to share profits • No separate taxes • Personal satisfaction

  5. Sole Proprietorship: Disadvantages • Unlimited liability • Hard to get funding • Difficult to be efficient and profitable • Hard to find talented employees • Limited lifetime of business

  6. Partnerships

  7. Partnerships • A business jointly owned by two or more persons • Types of partnerships • General partnership • Limited partnership • Easy to start • Partners decide how to divide losses and profits They’re starting a fishing business.

  8. Partnerships: Advantages • Easy to start • Partners bring in different skills • No separate taxes • Easier to get funding/loan • Easier to be run efficiently

  9. Partnerships: Disadvantages • Responsible for all partners’ actions • Conflicts between partners • Liability if company fails • Limited life of business

  10. Corporations

  11. Corporations • A corporation is a business organization recognized by law as a separate entity having the rights of an individual • To form a corporation: • Government Charter • Stocks • Investors

  12. Corporations: Advantages • Easier to get a loan • Professional managers can run it • Limited liability for owner(s) • Unlimited life of the business

  13. Corporations: Disadvantages • Hard to get charter • Owners don’t have full control on day-to-day operations • Double taxation • Government regulations

  14. Business growth and Expansion • Reinvestment • Growth Through Mergers • Types of Mergers • Horizontal mergers • Vertical mergers • Conglomerates • Multinational

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