1. Chapter 8 Section 1 & 2

2.  Key Concept  Most producers are business organizations, commercial, or industrial enterprise  Why it matters?  Vary in Size  Organized Differently  Free Enterprise System in US

3.  Business Organizations  Produce goods, provide services  Purpose of most is to earn profit  Supplies a market economy-jobs, income, taxes  Sole Proprietorship  Owned by a single person  Makes up 70% of US businesses  5% of sales

4. ADVANTAGESDISADVANTAGES  Not governed by as many regulations as other types of businesses  Easy to open or close  Only few regulations  Makes own decisions  Keeps all profits  Limited funds to start  Owners have unlimited liability- responsible for all losses, debts  Have limited life-closes if owner dies, retires, or leaves business

5.  Partnership- business co-owned by two or more people  Partners agree on division or responsibilities, profits, and losses  Found in all areas of business  Very common in professional and financial services

6.  Type 1: General Partnership  Partners share responsibilities, profits, debts, and losses equally  Type 2: Limited Partnership  At least one limited partner  Not involved in running business  Liable for only the funds they invested  Type 3: Limited Liability Partnership (LLP)  Limited Liability Partnership-all partners are limited  Not responsible for liabilities of other partners  Not all business can be LLPs  Only those in which malpractice can be an issue

7. ADVANTAGESDISADVANTAGES  Easy to Start/Close  Few regulations  More funds means it is easier to get loans  Joint decision making  Promote efficiency  Unlimited liability  Partners risk personal savings and property  Potential for conflict among partners  Limited life

8. Vocabulary Business OrganizationsProduce goods and provide services to gain a profit Sole ProprietorshipA company owned by a single person Unlimited Liabilityresponsible for all losses, debts Have limited life Limited LifeThe business closes if owner dies, retires, or leaves business PartnershipA business co-owned by two or more people General PartnershipPartners share responsibilities, profits, debts, and losses equally Limited PartnershipAt least one limited partner, who does not participate in day-to-day activities Limited Liability PartnershipWhere all partners are limited and are not responsible for liabilities of other partnerships