BUSINESS FORMS

Sole Proprietorship

A business owned and run by one person

Makes up about 80% of all businesses

Advantages

Easy to get started Relative ease in managing

Quick decision making Doesn’t have to share any profits Does not have to pay business income

tax

Major Weaknesses

Unlimited LiabilityOwner is personally responsible for all

losses & debts Difficulty in raising financial capital

(money) A minimum # of employees & minimum

inventory

Sole ProprietorshipsAdvantages Disadvantages

Easy to open or close Limited Funds

Few Regulations Limited Life

Freedom and control Unlimited Liability

Owner keeps profits

What do large corporations offer to attract new hires?

Fringe benefits

What happens when the owner dies? IT DIES

Partnership

A business jointly owned by 2 or more people

Advantages

Yes They bring ideas & different areas of

expertise

Major Disadvantages

Each partner is responsible for the other’s actions

It has limited life Potential conflict between partners

Corporations

A business organization recognized by laws as a separate legal entity

Charter

You are creating a legal entity separate from the people who own it! It can sue and be sued!

Who owns a corporation? Stockholders (WE DO!)

Two Duties of the Board of Directors

Select a president Keep shareholders informed

Advantages

Ease of raising money The corporations are fully responsible

for its debts & obligations The business continues to exist even

when ownership changes Selling & buying stock

Disadvantages

Very expensive No Double, Corporate, Personal More government regulations

http://money.cnn.com/2006/04/07/pf/bestjobs_moneymag_perks/index.htm

http://www.youtube.com/watch?v=EjTZF19jBs8

http://www.nbcnews.com/business/best-company-work-2014-2D11732356

http://www.youtube.com/watch?v=j6h-gm01Fb0

Awesome Companies to Work For

Business Combinations

Two reasons why businesses merge: The desire of a business to become

larger Efficiency

Economies of Scale

Cost of production falls as the business gets larger

Buy in bulk Advertising campaigns Eliminate competition Research & development

Horizontal Merger

Two or more firms that produce the same kind of product

Vertical Merger

When firms involved in different steps of manufacturing come together

Conglomerate

A firm that has at least 4 businesses, each making unrelated products

GE

Philip Morris

Multinational

A large corporation with branches in several countries

Pros & Cons

Increase tax revenue & creating jobs

Outsourcing jobs

http://www.cbsnews.com/video/watch/?id=4312234n

http://www.cbsnews.com/video/watch/?id=4312039n

DUBAI INC.