Chapter 8 Section 1

1. Chapter 8 Section 1 Leonardo Orraca Michelle Aranguren Per.8

2. Sole Proprietorship • The first decision that an entrepreneur must make when starting a new business is to see in what form of business organization best serves their interests.

3. Business Organization • Is an establishment formed to carry on commercial enterprise in others words is a company or firm. Sole Proprietorship • Is a business owned and managed by a single individual. • 75% of all small businesses are sole propietorship. 6% U.S sales

4. Advantages of Sole Proprietorships • Ease of Start-up: minimum requirements(authorization , site permit , name) • Relatively few regulations • Sole receiver of profit: owner gets to keep all profits after paying income taxes. • Full control • Easy to discontinue

5. Business License: • Authorization to start a business issued by a local government. • Zoning Law: law in a city or town that designates separate areas for residency and for business.

6. Disadvantages of Sole Proprietorship • Unlimited personal liability • Limited access to resources • Lack of permanence Liability: the legally bound obligation to pay debts. Fringe benefit: payment other than wages or salaries. Examples are like health insurance, retirement pay or paid vacation.

7. Quiz: Ch.8 Sec.1 • 1. What is a sole proprietorship? • 2.Name at least 2 advantages and 2 disadvantages of Sole Proprietorships • 3.Fill in the blank: An establishment formed to carry on commercial enterprise is __________________ • 4.What’s the percentage of all businesses that are sole proprietorships and what’s the percentage of how much U.S sales they generate? • 5. Give two examples of Fringe Benefits that sole proprietorships offer. • Define Liability