Sole Proprietorships -business owned by a single person or a married couple -3/4 of all businesses are sole proprietorships -Advantages – easier to make decisions if it’s a small business, easiest to set up -Disadvantages – more responsibility/more liability

Sole Proprietorships The owner in a sole proprietor ship gets all of the following All profits Pay for all loses (All the glory, and all the pain too) Is liable for the whole business, it is an extension of themselves

Advantages Sole Proprietorship Sole proprietorship is easy and inexpensive to create. The owner has complete authority over all business activities. It is the least regulated form of business ownership. The business pays no taxes; income is taxed at personal rate of owner. 3

Disadvantages Sole Proprietorship The owner has unlimited liability. Raising capital is more difficult. The business is totally reliant on skills and abilities of owner. The death of owner dissolves the business unless there is a will to the contrary. 4

Partnerships -Advantages -pool resources and capital -business owned by two or more people -Advantages -pool resources and capital -Disadvantages – each partner is liable for his share of the business. poor management system sometimes. For example, should there be an argument, what happens?

Advantages Partnerships Partnerships are inexpensive to create. General partners have complete control. Partners can share ideas. Partners can share ideas and secure investment capital more easily and in greater amounts. Section 7.1 Sole Proprietorships and Partnerships 6

Disadvantages Partnerships It is difficult to dissolve one partner’s interest without dissolving the partnership. There may be personality conflicts. Partners can be held liable for each others’ actions. Section 7.1 Sole Proprietorships and Partnerships 7

-pay dividends to shareholders Corporations -business that has a great many owners -sell stocks to investors (write down the definition of a stock if you need to: it is a share of a company that one may collect dividends from or hope it gains value) -pay dividends to shareholders

Corporations -Limited liability -the ability of a corporation to protect its shareholders by placing only the amount of capital they have invested at risk (i.e., if you invest $10,000, you will only ever lose $10,000) -Incorporation---legal process of forming a corporation through state government -Advantages – better organized for large businesses -Disadvantages – slow to make decisions

ability to raise investment money C-Corporation Advantages status limited liability ability to raise investment money perpetual existence employee benefits tax advantages Section 7.2 Corporations 10

Disadvantages C-Corporation expensive to set up income is more heavily taxed subject to double taxation on income pays taxes on profits stockholders pay taxes on dividends Section 7.2 Corporations 11

Non-Profit Organizations -business that is organized to provide a service and not to make large profits for the owners -many are charities or service groups -this doesn’t mean that people who work there don’t earn money, it just means that the company is putting all of its profits into its cause after it pays its expenses

Nonprofit Corporation A nonprofit corporation must fall within one of four categories: Because of the nature of the work they do, nonprofit corporations often seek and get tax-exempt status religion charity public benefit mutual benefit Section 7.2 Corporations

These questions go along with the class set “Five Reasons Why a Small Business Should Incorporate.” Please answer these on a separate sheet of paper. In your own words, describe three of the reasons for incorporating a business. Use the chart to answer the following questions: What are the only two things on this chart a Sole Proprietor can do? Which types of business can have unliminited numbers of owners? There are two things on this chart that only a Corporation can do. What are they? What is the only thing on this chart a Corporation CANNOT do? Which of these businesses can someone on a work visa from Japan create?

Labor Unions -Labor Unions are groups of workers who try to improve work conditions. -Goal of Unions??

Collective Bargaining -the ability of a group of workers to bargain together as a group Used by labor unions -Advantages-

Labor Union Methods -Collective Bargaining -Strikes – stop working until demands are met -Picketing – stop working and make your protests known to the public -Sit-downs – everyone stops working and sits in their place so no one else can work either -Slowdowns – everyone works, but at a slower pace

Employer Methods -Court Injunctions – an order by courts to go back to work or you will be in violation of the law -Blacklists – employers make lists of employees who are “troublemakers” and businesses don’t hire them -Lockouts – employers close shop and don’t let anyone come to work, denying them all benefits and pay until the issue is resolved

-Made Union activity a right, so workers have a right to organize NLRB -National Labor Relations Board -Made Union activity a right, so workers have a right to organize -Government acts as mediator between unions and employers

Union Practices can be Banned in some circumstances Union Limitations Union Practices can be Banned in some circumstances -Closed Shop—job where only union members are allowed to work -Featherbedding—practice of keeping too many workers

-Unions are weaker than in the past Today’s Labor Unions -Unions are weaker than in the past -Right to Work Laws have been passed, which out law “closed shops” in many places, giving all employees the right to chose whether or not to join the union Open Shops are created, giving employees the right to chose if they want to be union or not

Negotiations -Mediation— 3rd party negotiation where both parties are under no obligation -Arbitration— negotiations where both sides are to bound to the 3rd party decision

Labor Unions of Today Questions What conditions do we have at work today that were brought about by labor unions? Identify and explain two advantages of labor unions. Identify and explain two disadvantages of labor unions. What percentage of workers belong to labor unions in 2014? The last paragraph asks the question, “Do you think that labor unions have an important place in the workplace? Other than straight-out dissolving them, what would you change about unions? Answer this question.