Business Organizations

Michael Hefton & Frederick Wimberly

  1. sole proprietorship - unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm.
  2. Partnership- a business jointly owned by two or more persons.
  3. corporation- form of business organization recognized by a law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property enter into legal contracts sure and be sued.

Examples

1.) Sole proprietorship- a computer repair service

2.) Partnership- A landscaping business

3.) Corporation- Nike

  • Limited liability- situation in which a shareholder is not responsible for a corporation's debts
  • Unlimited liability- situation which a business owner is responsible for all the business's debts
  • Stock- certificate of ownership in a corporation
  • Dividend- check paid to stockholders usually quarterly representing portion of corporate profits
  • Board of directors- people who are elected by shareholders to run a corporate

Most Common Business

  1. Corporate
  2. Sole Proprietorship
  3. Partnership