Business Organizations Different Forms of Business

Learning Target I can explain the different types of business organizations. I can list pros and cons for each.

Focus Questions How would you describe the businesses that you most often visit? –Local Business? National Chain? –Who is the Owner(s) of the Business?

Business Organization A business organization is the ownership structure of a company or firm Can you name some types of business organizations?

Sole Proprietorships sole proprietorshipA sole proprietorship is a business owned and managed by a single individual The single owner earns all profits and responsible for all debts. Sole proprietorships are the most common form of business organization Yet they generate only about 4 percent of all United States sales Examples in Milwaukie?

Partnerships 3 Categories of Partnerships General Partnership –In a general partnership, partners share equally in both responsibility and liability Limited Partnership –In a limited partnership, only one partner is required to be a general partner, or to have unlimited personal liability for the firm Limited Liability Partnership –A newer type of partnership is the limited liability partnership. In this form, all partners are limited partners

Franchises business franchiseA business franchise is a semi- independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area

Corporations A corporation is a legal entity, or being, owned by individual stockholders –Stocks, or shares, represent a stockholder’s portion of ownership of a corporation –A corporation which issues stock to a limited a number of people is known as a closely held corporation –A publicly held corporation, buys and sells its stock on the open market

Corporate Mergers Horizontal Mergers –The combining of two or more firms in the same market with the same good or service The Government may try to block the merger to prevent monopolies Vertical Mergers –Two or more firms in involved in different stages of production of a good or service

Corporate Mergers Conglomerates – a business combination merging more than three companies that produce unrelated products or services.

Multinationals Produce and sell goods in more than one country Obey laws and pay taxes in the countries where they operate

Cooperatives cooperativeA cooperative is a business organization owned and operated by a group of individuals for their shared benefit Consumer Cooperatives –Retail outlets owned and operated by consumers –Sell their goods to their members at reduced prices Service Cooperatives –Provide services, rather than goods (credit unions) Producer Cooperatives –Agricultural marketing cooperatives that help members sell their products

Non-Profit Organizations Institutions that function like business organizations, but do not operate for profits are nonprofit organizations –Public Schools, Red Cross, Hospitals –Professional, business and trade Organizations –Labor Unions