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Chapter 18.3

Chapter 18.3. Types of Businesses. Types of Businesses. Sole Proprietorship Partnership Corporation Nonprofit Organization. Sole Proprietorship. Business that one person or couple owns About 75% of businesses in the US are sole proprietorships Also known as “Small businesses”

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Chapter 18.3

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  1. Chapter 18.3 Types of Businesses

  2. Types of Businesses • Sole Proprietorship • Partnership • Corporation • Nonprofit Organization

  3. Sole Proprietorship • Business that one person or couple owns • About 75% of businesses in the US are sole proprietorships • Also known as “Small businesses” • Gas stations, barber shops, grocery stores, etc. • Pros: you keep all the money; you’re your own boss • Cons: you take all the risks; sink or swim

  4. Partnership • Business owned by two or more people, often a family • Law offices are often partnerships • People have different skills and tasks, and they’re pooled together • Sheetz is an example of a partnership

  5. Corporation • Large businesses owned by many people • Need to be incorporated,or granted permission from the state • Instead of buying the stuff themselves, corporations look for investors, who agree to buy the company for a price (STOCKS) • The stocks help start up the company and the risk-takers get some of the profit made

  6. Types of Stock • Common stock – bought by ordinary people • When the company makes profit, you get a yearly check of the profit called a dividend • Dividend stock – you get a dividend whether the company makes a profit or not; these people get paid before the “common stockholders”

  7. Advantages of Corporations • A lot of people take risks; therefore, if the company fails, one person isn’t stuck with all of the loss • The larger and more-established the corporation, the safer the risk • Very bureaucratic and organized - how can this be a con, too?

  8. Nonprofit Organizations • Organizations that make money and have a similar business structure to partnerships and corporations • They make no profit, however. • Where’s the “profit” go to? • Role of tax exemptions

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