1. Chapter 5 Proprietorships & Partnerships
Characteristics of an Entrepreneur
Getting a Business Started
Proprietorships
Partnerships

2. Characteristics of an Entrepreneur
Risk Takers
Enjoy freedom and independence
Enjoy making their own decisions
Leaders
Energetic
Good Thinkers

3. Activity #1 Adv. & Dis. of Entrepreneurship
Advantages Disadvantages

4. Proprietorships
Sole Proprietorship - is a business owned and operated by one person. The owner furnishes the money, management, and labor. The owner is entitled to all of the profits of the business.
Creditors - those to whom money is owed. if the owner has debts, creditors have first claim against the assets.

5. Advantages Disadvantages
Sole Proprietorship
Is a business owned by 1 owner
Advantages Disadvantages

6. Advantages of a Sole Proprietorship
Owner is the boss
Owner receives all of the profits
Owner personally knows employees and customers
Owner can act quickly in decision making
Owner is free from Red Tape
Owner pays less income tax than a corporation

7. Disadvantages of a Sole Proprietorship
Owner may lack special skills and abilities
Owner may have to work longer hours
Owner may lack funds
Owner bears all losses
Illness or death may close the business

8. Advantages Disadvantages
Partnership
Is a legal agreement between 2 or more people to be jointly responsible for the success or failure of a business.
Advantages Disadvantages

9. Advantages of Partnerships
No limit to the number of partners
Skills and abilities are pooled
Sources of capital are increased
Credit position is improved
Contribution of Goodwill
Increased concern in business management
Less tax burden than corporations
Elimination of Competition
Retirement from Management

10. Disadvantages of Partnerships
Unlimited Financial Liability
Disagreement among partners
Each is bound by the contracts of others
Uncertain Life
Limited Sources of Capital
Unsatisfactory division of profits
Difficulty in withdrawing from partnership

11. Limited Partnerships
Limited Partnerships - not all of the partners have unlimited liability to the debts of the business. however, there must be at least one general partner that has unlimited liability and the limited partner cannot be named in the name of the company.
This is an ideal situation for those who do wish to invest in the company, but do not have time or the interest to actively participate in its management.