Business Ownership
By Michael Foder
Sole Proprietership
Four characteristics:
- Business owned by one person
- Owner keeps all of the profits
- Write off business expenses
- All earnings of the business are taxed as income of the owner
Advantage and Disadvantage
Advantage: No fees
Disadvantage: Long hours
Example of a proprietorship
One example of a sole proprietorship is a landscape business
interesting details about the business structure
- All you need is a license or permit
- Little business administration needed
PARTNERSHIP
Four characteristics
- limited life
- mutual agency
- unlimited liability
- Ease of formation
Advantage and Disadvantage
Advantage: your business is easy to establish and start up costs are low
Disadvantage: Risk of disagreement and friction between partners
example of a partnership
Mcdonalds
details about business structure
- licenses and permit
- More rules to hire employees
CORPORATION
four characteristics
- limited liability
- transfer ability of ownership
- capacity to contract
- centralized management
Advantage and Disadvantage
Advantage: corporations may be able to raise additional funds by selling shares in the corporation.
Disadvantage: Governmental agencies monitor corporations, which may result in added paperwork
Example of a corporation
Adidas
Business structure details
- Have to comply with more regulations and tax requirements
- Don't put personal assets at risk
FRANCHISE
Four characteristics
- strong desire to improve business skills
- Open to change and feedback
- Committed to the power of brand
- High energy, fast paced
Advantage and Disadvantage
Advantage: Go into business for yourself but not by yourself
Disadvantage: Must be careful to balance restrictions
example of a franchise
Allstate
interesting details of business structure
- one business owner licensing trademarks and methods to an independent entrepreneur
- Franchiser and franchisee have an ongoing relationship, and the franchiser often provides a full range of services, including site selection, training, product supply, marketing plans and even assistance in obtaining financing
non profit organization
four characteristics
- Atmosphere of "scarcity"
- program outcomes are difficult to assess
- individuals have mixed skill levels
- participation of volunteers
advantage and disadvantage
advantage: Employee commitment
Disadvantage: Limited funding
Example of a non profit organization
Boy Scouts of America
details of business structure
- Some states have their own requirements for the number of directors
- Usually divided into three areas. governance, program, and administration