1. 5 BUSINESS ORGANIZATION 5-1 Business in the U.S. Economy
C H A P T E R 5
BUSINESS ORGANIZATION
5-1 Business in the U.S. Economy
5-2 Forms of Business Ownership
5-3 Organizational Structure for Businesses

2. Contingent worker- employee with no long term obligation (short term or temporary worker) PERCENT OF BUSINESSES BY EMPLOYEE SIZE

3. BUSINESS ACTIVITIES Generating ideas Raising capital
Employing and training personnel
Buying goods and services
Marketing goods and services
Maintaining business records

4. TYPES OF BUSINESSES Producer- Create products and services
Example: Extractor, Farmer, manufacturers
Intermediaries- Selling goods & services
Example: Retail clothing store, COSTCO
Service business- Offer something intangible
Example: Dentist, Teacher

5. 3 TYPES OF BUSINESS OWNERSHIP
Sole Proprietorship- 1 owner
Example: Duncan’s Landscape (small business)
Partnership- 2 or more owners
Example: Law office of Smith & Williams
Corporation- A legal entity where the owners are shareholders (stock ownership)
Example: Apple, Wal-Mart

6. 3 TYPES OF BUSINESS OWNERSHIP
Sole Proprietorship-
Unlimited Liability- Owner is 100% responsible for the business
Partnership-
Partnership Agreement- Legal Document that defines the details of each partner
Corporation-
Articles of Incorporation- Legal documents that defines the details of the corporation.
Stock- shares of ownership in a corporation
Limited Liability- The risk is limited to your investment.

7. Forms of Ownership U.S. Business Comparison by Form of Ownership
Number of Businesses (2006)
Total Revenue (Thousands)
Percent of All Businesses
Percent of Total Revenue
Proprietorship
22,075,000
1,278,000,000
71.53%
4.06%
Corporation
5,841,000
26,070,000,000
18.93%
82.82%
Partnership
2,947,000
4,131,000,000
9.55%
13.12%
Total
30,863,000
31,479,000,000
100.00%

8. Checkpoint 
Which form of business ownership is the most complex and difficult to form?
The corporation is more complex to begin than other business forms.
Forming a corporation requires much more bureaucracy, is more subject to government regulations, requires the organization of a board, and must have clearly defined bylaws.

9. OTHER FORMS OF OWNERSHIP
Franchise- a chain business that you can purchase for a fee. Any 3 of the ownerships can invest in a franchise
EXAMPLE: McDonalds, Sport Clips,

10. Checkpoint 
What are the other specialized forms of business ownership?
Limited liability partnership
Joint venture
S corporation
Limited liability company (LLC)
Nonprofit corporation

11. KEY TERMS
Mission Statement- a written objective of the company’s goals and vision
Goal- the objective, what are you wanting to accomplish
Policies- rules of the business
Procedures- methods of activities that support the mission statement and goals.
Organization chart- chain of command chart, who is in charge of who and what

12. BUSINESS ORGANIZATION CHART

13. (3 types of ownership, advantages/ disadvantages/legal documents) Sole Proprietorship Advantage- 100% profit, easy to start Disadvantage- 100% liability & risk, long hours Legal Docs: Assumed Name Certificate, SS# or Tax ID Partnership Advantage- shared responsibility and risk Disadvantage- shared profits Legal Docs: Partnership Agreement, Tax ID Corporation- Advantage – limited liability, more resources Disadvantage- double taxation, limited profits Legal Docs: Corporate Resolution, Articles of Incorporation, Tax ID

14. Page 2A & 2B (ONLINE RESEARCH) FRANCHISE RESEARCH (2) CORPORATION RESEARCH