1. Learning Objectives 1. Compare the advantages and disadvantages of the sole proprietorship 2. Contrast general and limited partnerships 3. Compare the advantages and disadvantages of corporations 4. Compare the advantages and disadvantages of franchises 5. Describe the motivation behind creating a cooperative

2. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 2 Financial Gain - Forbes magazine - most fortunes made in business Independence - Control own destiny

3. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 3 Sole Proprietorship One owner Partnership Two or more owners Corporation Owned by stockholders

4. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 4 Advantages Disadvantages Easy to start Simplicity Freedom Possible tax advantages Unlimited Liability Financial restraints Survival tied To one person Time commitment

5. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 5 Partners have Unlimited liability Limited liability No management participation General Partnership Limited Partnership

6. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 6 AdvantagesDisadvantages More capital Expanded mgmt skills Individuals can specialize Unlimited liability Legal complications Transfer of ownership

7. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 7 Roman Empire 100 BC Group ventures Wanted Limited liability Self contained entity Own property, litigate, Make contracts

8. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 8 Corporate charter Board of directors Stockholders A legal entity Key terms

9. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 9 Multinational Corporation Public Corporation Private Corporation

10. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 10 AdvantagesWeaknesses Legal entity Limited liability Continuity of ownership Easy transfer of ownership Complex legal requirements Double taxation Paper work Information disclosure

11. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 11 AdvantagesWeaknesses Proven business format Brand recognition Professional Marketing Reduced risk High start up costs Profits are shared Limited control

12. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 12 A business collective owned and operated by the people who use it. Did you know that Sunkist, Blue Diamond, Land O’Lakes and Ocean Spray are all Cooperatives?

13. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1 - 13 To become aware of career opportunities To understand how businesses are created and operate. To acquire the vocabulary of business