1. Types of Business Organization
Sole Proprietorship
Partnerships (Limited/Gen)
Corporations
Types of Business Organization

2. Finding the Right Business Structure
Types of Business Organization
Organizing a Business
The three main types of business organizations are:
Sole Proprietorships
Partnerships
Corporations
Finding the Right Business Structure

3. U.S. Sole Proprietorships, Partnerships, and Corporations
Types of Business Organization
U.S. Sole Proprietorships, Partnerships, and Corporations

4. Sole Proprietorship & Partnership
We Will: Identify advantages and disadvantages of sole proprietorships and partnerships
I Will: Identify characteristics of each business type

5. Terms to Know What is liability?
the state of being responsible for something, especially by law

6. Terms to Know sole proprietorship a business owned by one person
unlimited liability
when the owner is responsible for the company’s debts
partnership
a business owned by two or more people who share its risks and rewards

7. Sole Proprietorship- 72% of businesses

8. Sole Proprietorship a business owned by one person Remember:
About three-quarters of all businesses in the United States are sole proprietorships.

9. Mark Cuban… Being an entrepreneur

10. Advantages Ease of start up and manage You keep all profits
(YOU are in CHARGE)
You keep all profits
Lower taxes
Ease of exit

11. Weakness Unlimited Liability Difficulty in raising financial capital
Limited size and efficiency
Limited access to credit
Limited Life

12. Successful Sole Proprietorships

13. Successful Sole Proprietorships
Yearly Revenue: $3,000,000,000 +
Total Employees: 60,000 
Houston-area employees: 10,750 
Year Founded: 1980 
Top Executive: Tilman J. Fertitta
Business: Dining, hospitality, entertainment and gaming less

14. Stop and Think If you started your own business what would it be?
What are some of the 4 Factors of production you would need.
2 examples for each
Land
Labor
Entrepreneur
Capital

15. 5% of businesses

17. Partnerships Two major types of partnerships:
General Partnership: (most common type) all partners are responsible for management and the financial responsibilities of the partnership.
Limited Partnership: at least one partner is not active in the day to day running of the business. They have limited liability.
Articles of Partnership: contract between partners spelling out the rules of partnership.
Dividing profit
Dividing responsibility
Admitting new partners
Buying out partners

18. Partnership Partnerships Advantages of Partnerships: Easy to start
Easy to Manage: not dependent on one person, each partner has different things to offer
No special business taxes
Easier to raise financial capital/credit
Larger than sole proprietorship
Easier to attract qualified workers

19. Partnership Partnerships Disadvantages Unlimited liability
Limited partner is only responsible for his initial investment. He has limited liability.
Limited Life
Conflict between partners

20. Successful Partnerships
Successful Partnerships Video

21. Successful Partnerships
Harry, Albert, Sam, and Jack Warner.

22. Successful Partnerships
The company was founded in a one-car garage in Palo Alto by William "Bill" Redington Hewlett andDavid "Dave" Packard

23. Successful Partnerships
Brothers Richard James "Dick" McDonald and Maurice James "Mac" McDonald  were American restaurateurs and entrepreneurs who developed and opened the first  McDonald's restaurant in 1940. 

24. Successful Partnerships
Microsoft was founded by Paul Allen and Bill Gates

25. Successful Partnerships
Co-founders Ben Cohen and Jerry Greenfield actually first met while running around a track in seventh grade gym class.
“We were the two slowest, fattest kids in the class,”

26. What fits best with each business??? Tell me Why!!!

27. Decision Making? What is the difference between a
Lets Assess…
What is the difference between a
Partnership and Sole Proprietorship?
Ownership?
Access to Capital & Credit?
Decision Making?

28. Corporations
We Will: Identify characteristics and explain how a corporation is formed
I Will: Identify key characteristics of the daily operation of a corporation

29. Corporation Terms to know
a company that is registered by a state and operates apart from its owners

30. Terms to know Limited Liability
holding a firm’s owners responsible for no more than the capital that they have invested in it

31. Corporation- Set up Terms to know
Charter: a document granted by the state giving a corporation the right to do business

32. Corporation- Set up Terms to know
Stock: shares of ownership in the corporation
A stock represents claim on a share of a corporation’s assets and profits.
Stocks are typically riskier and long-term investments.
Stockholders:(shareholders) owners of stock.

33. Corporation- Set up Terms to know
Bonds: a debt investment in which an investor loans money to an entity (corporation) which borrows the funds for a defined period of time at a variable or fixed interest rate.
Bonds are typically low-risk and good for short-term investments.

34. Stocks  and bonds represent two different ways for an entity to raise money to fund or expand their operations

35. Corporation- Set up Terms to know
Reasons to own stock:
Dividends: share of corporate profits paid to stockholders
Speculation: buy in hope that price of stock will increase.

36. Corporations- 20% of Business 74%-profits

37. Stock https://www.youtube.com/watch?v=hCzIcS_xPiQ
Stocks and Bonds 101 | Fidelity

38. Corporation- Ownership
Common Stock is a basic share of ownership in a corporation
Have voting rights in the management of the company
In reality they turn over voting rights to someone else with a proxy: giving someone else the right to vote your share of stock.
Preferred Stock:
Non voting shares of ownership
Guaranteed dividend
Liquidation benefit: If corporation goes out of business they are ahead of common stockholders in getting back money.
Board of Directors: duty to direct the corporations business by setting board policies and goals
Elected by common stockholders
Hires a professional management team to run day to day activities. (CEO, CFO….)

39. Advantages of a corporation:
Corporations
Advantages of a corporation:
Ease of raising financial capital (main advantage)
Selling stock to investors (ownership)
Selling bonds: a written promise to repay a loan on a specific date (debt)
*Principal: the amount borrowed
*Interest: the price paid for the
use of another’s money
Borrowing money from banks.
Limited liability
Unlimited life (Longevity)
Ease of transferring ownership:. Buying and selling stock is easy and is done millions of times a day

40. Corporations Income is taxed.
Disadvantages of a corporation:
Expensive to start up.
Stockholders (owners) have a limited role
Profits are taxed (double taxed)
Corporations are subject to more government regulations than sole proprietors or partners
Income is taxed.
Stockholders pay taxes on profits issued to them

41. Finding The right business Structure

42. How do Corporations differ from Partnerships and Sole Proprietorships?
Lets Assess…
How do Corporations differ from Partnerships and Sole Proprietorships?
Ownership?
Access to Capital & Credit?
Decision Making?

43. Let’s Assess Complete “SWEET OPPORTUNITIES” Activity
Make recommendation of business type
Tell why you chose that business type for that client.
Identify the negative (disadvantage) that the client will encounter based on the information.
Suggest how the client might minimize the disadvantage
USE NOTES TO COMPLETE

44. Other Types of business Organizations

45. How to become a rich man from nothing Warren Buffett

46. Franchise
Franchise
a contractual agreement to use the name and sell the products or services of a company in a designated geographic area
To run a franchise, you have to invest money and pay franchise fees or a share of the profits.

47. a company operating in several countries.
multinational
a company operating in several countries.

48. Non-Profits: We don’t like $$$ we just want to make you

49. NON PROFITS
a type of business that focuses on providing a service, not making a profit
A nonprofit organization does not pay taxes because it does not make a profit.

51. Red Cross Controversy

52. Cooperatives
A farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits.
There are more than 29,000 cooperatives in the U.S. You may not realize that many household names in the business world are co-ops:

53. Mergers and Acquisitions
a combination of two things, especially companies, into one.
5 Reasons to merge
Make money faster,
Increase efficiency,
Acquire new product lines,
Catch up to or eliminate rivals,
Lose a company identity.

54. Mergers and Acquisitions
a combination of two things, especially companies, into one.

55. Mergers and Acquisitions
Horizontal Merger- when two or more companies that product the same kind of product join forces.
Vertical merger- when two or more firms that are at different steps of manufacturing process join together.
Conglomerate merger –

59. Conglomerate
is a firm that has at least four businesses, each making unrelated products.
Overall, Nestlé owns over 8,500 brands in over 80 countries

60. Bankruptcy
a legal status of a person or other entity that cannot repay debts to creditors.
A debt is also is also known as a liability

61. Bankruptcy
Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court.   
All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

62. Bankruptcy
a combination of two things, especially companies, into one.

63. Let’s Assess
Complete WS

64. Starting a Business Complete Business Plan Activity

65. END