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Business organization

Business organization. March 7, 2013. Partnership. More formal/complex than a proprietorship (one owner) Partnership agreement : a written agreement among ALL owners. Details rules and procedures that guide owners and operation

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Business organization

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  1. Business organization March 7, 2013

  2. Partnership • More formal/complex than a proprietorship (one owner) • Partnership agreement: a written agreement among ALL owners. • Details rules and procedures that guide owners and operation • Identifies business name, investments, contributions of each partner • Shows how profits and losses will be divided among partners • Defines authority/responsibilities for each person • Outlines how partnership can be dissolved • Should have business name, and names of each partner for registration with the state

  3. Partnership • In your notes write down some benefits to a partnership. • Think of a famous partnership (current or past). What do you think each person brought to the table?

  4. Corporation • Subject to many more laws • Liability of owner is limited to the amount invested • Must follow the laws of the state it was organized in • To officially form, you must file articles of incorporation with the state. They are: • A written legal document that defines ownership, conditions, and operating procedures • Must create corporate bylaws • State usually provides the form to fill out • Must name a board of directors (they make major policy and financial decisions)

  5. Corporation • http://www.sos.wa.gov/_assets/corps/LLC2010.pdf

  6. Specialized Partnerships and Corporations • Limited Liability Partnership: identifies some investors who cannot lose more than the amount of their investment • Joint Venture: a unique business organized by two or more other businesses to operate for a limited time and for a specific project • S-Corporation: offers limited liability of a corporation. All income passed through to owners based on their investment and taxed on their individual tax returns • Limited Liability Corporation: provides liability protection. No articles of incorporation or bylaws are needed. Simpler set of organization/operating requirements than a corporation • Nonprofit Corporation: group of people, joined together to do an activity that benefits the public. Free from corporate income tax. Must organize as a corporation though.

  7. Cooperatives and Franchises • Cooperative: owned by members, serves their needs, and managed in their interest. A consumer cooperative is formed to help purchase goods/services cheaper • Franchise: written contract giving permission to operate a business to sell products and services in a set/particular way. Maintains day to day operations and receives profits. Pays a fee and percentage of profits to the franchiser in return for operating assistance

  8. Key Concepts • The form of ownership that gives one person sole control over all business decisions is the: a. proprietorship b. partnership c. corporation d. franchise 2. True or False: All investors in a general partnership have full liability for the debts of the business. 3. The people who make the major policy and financial decisions in a corporation are the: a. investors b. board of directors c. managers d. owners

  9. Key Concepts Continued 4. A special form of business organization that combines advantages of a corporation and a partnership is a: a. franchise b. nonprofit corporation c. cooperative d. limited liability company 5. On your paper….a little scenario for you. Two friends want to open a store to sell the work of local artists. They have asked you to explain the advantages and disadvantages of the THREE common forms of business ownership (yesterday’s lesson). Write a memo/letter to them outlining the advantages and disadvantages. Include a list of questions that might help your friends make a decision.

  10. Closing • In your notes: write a brief description of the THREE common forms of business ownerships WITHOUT looking at your notes. Compare with your neighbors.

  11. Internet Work • Use the internet to determine the following (U.S Census Bureau website) • See what you can find out about business • Can you find information/statistics on the three main forms of business? • Can you find the information for our state? • Record all information and statistics you find so we can share and discuss as a class.

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