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
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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
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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
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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
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