Business organizations
description
Transcript of Business organizations
BUSINESS
ORGANIZATIONS
CHAP T ER 3
TYPES OF BUSINESS ORGANIZATIONS
Sole Proprietorships Partnerships Corporations
SOLE PROPRIETORSHIPS A business owned and run by one person
Easy to start Just need to pay business licenses and
fees
Example:Opening up yourown restaurant
SOLE PROPRIETORSHIP: ADVANTAGES
Easy to start and manage Easy to leave business Don’t have to share
profits No separate taxes Personal satisfaction
SOLE PROPRIETORSHIP: DISADVANTAGES
Unlimited liability Hard to get funding Difficult to be efficient
and profitable Hard to find talented
employees Limited lifetime of business
PARTNERSHIPS
PARTNERSHIPS A business jointly owned by two or
more persons Types of partnerships
General partnershipLimited partnership
Easy to startPartners decide how to divide losses and profits
They’re starting a fishing business.
PARTNERSHIPS: ADVANTAGES Easy to start Partners bring in different skills No separate taxes Easier to get funding/
loan Easier to be run
efficiently
PARTNERSHIPS: DISADVANTAGES
Responsible for all partners’ actions Conflicts between
partners Liability if company fails Limited life of business
CORPORATIONS
CORPORATIONS A corporation is a business organization
recognized by law as a separate entity having the rights of an individual
To form a corporation: Government CharterStocksInvestors
CORPORATIONS: ADVANTAGES
Easier to get a loan Professional managers can run it Limited liability for owner(s) Unlimited life of the
business
CORPORATIONS: DISADVANTAGES
Hard to get charter Owners don’t have full
control on day-to-day operations
Double taxation Government regulations
BUSINESS GROWTH AND EXPANSION
Reinvestment Growth Through Mergers
Types of Mergers Horizontal mergers Vertical mergers Conglomerates Multinational