1. SWBAT explain the differences between the business organizations SWBAT compare the strengths and weaknesses of the partnership

3.  Organizations that represent the factors of production

4.  A profit-seeking enterprise that serves as the main link between scare resources and consumer satisfactions.  Ex. Farms, drugstores, clothing stores, law firms, computer manufacturers

6.  A business owned and run by one person  Most numerous  Smallest in size  Collectively have only a fraction of the total sales of all businesses  Most profitable (1/4 of all business profits)

7.  Easiest to start up  Gov’t licenses  Fees by gov’t  Lemonade stand, lawn-mowing business, restaurant, etc.  Home or from an office space

8.  1. Ease of starting one  2. Ease in management  3. Enjoy profits without having to share them with others  Does not have to pay business taxes (separate legal entity, only individual income taxes)  Psychological (“Own boss freedom”)  Can leave the business if he owner decides to, no legal or tax considerations

9.  1. “Unlimited liability”- responsible for everything  2. Difficulty in raising financial capital- money to set up business  3. Size and Efficiency  inventory  4. Limited Managerial Experience  Ex. Great inventor, little business sense  5. Difficulty attracting highly qualified employees  Fringe benefits, reputation  6. Limited Life

10.  A business owned by 2 or more persons  7% of all business organizations in the US  Small fraction of total business sales and profits

11.  GENERAL PARTNERSHIP= all partners are responsible for the management and financial obligations of the business  LIMITED PARTNERSHIP= at least one partner is not active in the daily running of the business (contribute financially)

12.  1. Ease of establishment (costs minimal over several partnerships)  2. Ease of management  3. Lack of special taxes (only a special schedule)  4. Attract financial capital more than proprietorships  5. Larger size, more efficiency (law or medicine)  6. Attract top talent (specialized services)

13.  1. Each partner is fully responsible for the acts of all other partners (choose carefully)  Limited partnership has limited liability- if business fails, only lose the original investment  2. Limited life  Agreement  3. Conflict b/w partners

14.  A form of business organization recognized by law as a separate legal entity having all the rights of an individual  Can buy and sell property, enter into legal contract, sue and be sued  90% of business is done by corporations

15.  Must file for permission from nat. gov’t  Charter  Purpose  Name, address  Specifies number of stock, or ownership parts of the firm  Sold to investors known as stockholders or shareholders  **If profitable, shareholders could receive a dividend - a check representing a portion of the earnings/profits

16.  Investor becomes and owner an has certain ownership rights  Depends on type of STOCK  COMMON STOCK- basic ownership- one vote for each share owned  elect the BOARD OF DIRECTORS whose duty is to direct the corporation's business by setting broad policies and goals. The board also hires a professional management team to run the business on a daily basis  PREFERRED STOCK- non voting ownership of the corp. Get investment back before common stockholders- can’t elect BOD

17.  1. Ease of raising financial capital  Stocks  Bonds- written promise to repay later (interest)  2. Hire best management  3. Provides limited liability for its owners  Bankruptcy- court-granted permission to not pay some or all of its debts. Investors only lose initial investment  4. Unlimited life  5. Ease of transferring ownership

18.  1. Difficulty and expense of getting a charter  2. Shareholders have little say after voting the BOD  3. Separate legal entity- has to pay taxes just like private individuals.  Detailed records of REVENUES- or all receipts from sales, etc.  Detailed records of expenses  4. More gov’t regulation  Stock- SEC  Take-overs

19.  Work in a business like way to make best of scarce resources  DO NOT seek financial gain for members  Provides goods and services with other rewards:  Improving educational standards  Caring for the sick  Helping those in need

20.  Legally incorporated to take advantaged of unlimited life feature  Do not issue stock, pay dividends, or pay income taxes  Often produce revenues and expenses, but they keep surpluses to further the work (Value of products hard to meaure)  Adoption agencies, youth clubs

21.  Voluntary association of people formed to carry on some kind of econ activity that will benefit its members  3 classes

22.  Buys bulk amounts  Food and clothing  Offer members products for lower prices

23.  Services  Insurance, credit (Credit union)

24.  Helps members sell their products  Farmers  Ocean-Spray