1. Sole Proprietorship, Partnership and Corporations
The Role of Business
Sole Proprietorship, Partnership
and Corporations

2. Starting a Business
Entrepreneur: Willing to take a risk to start a business
Gather the factors of production
Must learn as much as possible about the business
Laws, regulations and tax codes

3. Elements of Business Operation
Expenses
Purchasing of materials and capital
Advertising
Customers and vendors know your business
Receipts and Record Keeping
Tracking of expenses and income
Risk
Risk and reward is considered the most essential part

4. What is Profit? Income – All Expenses = Profits Expenses:
Wages, Taxes, Parts, Utilities, etc.

5. Sole Proprietorship Business owned and run by one individual
Proprietor = Owner
Oldest form and most common business
Advantages:
Ease of Operation – “You’re the Boss”
Potential Profits
Disadvantages:
Limited Life
Limited Funds
Limited Abilities
Unlimited Liabilities (legally responsible)

6. Partnership Business owned by two or more persons
Limited: partners not sharing equal responsibility
General: full duties and responsibilities
Advantages:
More Money (Capital) Available
“Two heads are better than one”
Disadvantages:
Unlimited Liability
Limited Life
Limited Funds
Partners May Disagree

7. Corporation
Business licensed (charter) by state or federal government as a legal individual
Stockholders (shares) are true owners of corporation
Advantages:
Limited Liability
Unlimited Life
Easy Transfer of Ownership
Disadvantages:
Costly and Complicated to set up
Double Taxation
Corporate and Personal Income Tax