Presentation on theme: "Warmup Do you know anyone who owns their own business? Describe what they do."— Presentation transcript:
1 WarmupDo you know anyone who owns their own business? Describe what they do.
2 Unit III Business and Labor Part I – Types of Business
3 Sole Proprietorship single owner – most common form of business in US AdvantagesOwner makes all decisionsKeep all the profitsNo corporate income taxEasiest to set upDisadvantagesNot an expert in all areasResponsible for all mistakesUnlimited Liability responsible for all debts, personal property can be takenHard to raise capital (money)
4 Partnership Two or more owners AdvantagesCan raise more capitalShare in responsibilityNo corporate income taxDisadvantagesUnlimited Liability responsible for all debts, personal property can be takenShare decision makingShare profitsMore complicated to set up than sole proprietorship
5 Corporation Company is owned by people who buy its’ stock AdvantagesCan raise a lot more capital ($) through sale of stocks and bondsDecisions are made by professionalsLimited Liability only responsible for how much you have investedEarns the most money in USDisadvantagesHave little say in how the company is runOnly share in portion of profitMost complicated to set upCorporate Income Tax
6 Business Types and Profits Sole Proprietorships = 72%Corporations = 20%Partnerships = 8%EarningsCorporations = 83%Partnerships = 12%Sole Proprietorships = 5%
7 How are corporations established? Charter: government permission to organize a corporationStock:shares in the company sold to the public