Intro to business 5-2

Partnership

A business owned and controlled by two or more people who have entered into a written agreement

Proprietorship

A business owned and run by just one person

Nonprofit Corporation

A group of people who join to do some activity that benefits the public.

Corporation

A separate legal entity formed by documents filed with your state. It is owned by one or more shareholders and managed by a board of directors.

Joint Venture

A unique business organized by two or more other businesses to operate for a limited time and for a specific project.

Partnership agreement

A written agreement among all owners. It details the rules and procedures that guide ownership and operations. It typically identifies the business name, the investments, and other contributions of each partner.

Articles of incorporation

A written legal document that defines ownership and operating procedures and conditions for the business

Cooperatives

Businesses that are operated with its members best interest at heart.

Limited Liability Partnership (LLP)

Identifies some investors who cannot lose more than the amount of their investment, but they are not allowed to participate in the day-to-day management of the business

2 disadvantages of a proprietorship

If your business fails you have almost no shelter from creditors. Any money and other assets owned by the proprietor, whether used in the business or not, can be obtained by creditors to pay the business debts.

Example of partnership

Law firms

7 specialized types of business ownership

Limited Liability Partnership (LLP). Joint Venture. S-Corporation. Limited liability company (LLC). Nonprofit Corporation. Franchise. Cooperatives.

2 advantages of a partnership

More skills. Better hours.

S-Corporation

Offers the limited liability of a corporation.

Limited Liability Company (LLC)

Provides liability protection for owners. Simpler set of rules for organizing.

Example of a Corporation

Snap-on

Board of directors

The people who will make the major policy and financial decisions for the business

Example of proprietorship

Threads (t-shirt place)

Franchise

When you sell someone else's product. Can be used as a proprietorship, partnership, and a corporation.

2 advantages of a proprietorship

You are the sole owner of your business. It is the easiest form of a business to start and end.

2 advantages of a corporation

You don't lose as much money, you only lose as much as you invested. Greater chance of having success.

2 disadvantages of a partnership

You have to share profits. You might not always get your way on major decisions.

2 disadvantages of a corporation

You only get paid based on what the board of directors decide on you equity. Corporations must meet more legal requirements.