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Introduction to Business

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Introduction to Business Chapter 6 Business Ownership Sole Proprietorship A business owned by only one person Sole Proprietorship Sole Proprietorship Partnership A ... – PowerPoint PPT presentation

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Title: Introduction to Business


1
Introduction to Business
  • Chapter 6
  • Business Ownership

2
Sole Proprietorship
  • A business owned by only one person

3
Sole Proprietorship
Ownership Start-up Costs Taxes Liability Responsibility for Decisions
One person Very hard to get financing financing usually comes from owner, family and friends Owner pays income taxes Unlimited (full responsibility for your companys debts) All reside with the owner all the glory and all the blame goes to the owner
4
Sole Proprietorship
Advantages Disadvantages
Easy to start Get to be own boss Keep all profits Taxes are usually low Have to pay for everything Might also lack business skills Unlimited liability
5
Partnership
  • A business owned by two or more persons who share
    the risks and rewards

6
Partnership
Ownership Start-up Costs Taxes Liability Responsibility for Decisions
Two or more people All partners can contribute which spreads the costs Owners pay income taxes Unlimited Each partner can make decisions for all the partners, whether they agree or not
7
Partnership
Advantages Disadvantages
Easy to start Easier to obtain capital Partners might bring different skills Share profit Might not get along with partner Unlimited legal and financial liability
8
Corporation
  • A business owned by many people but treated by
    law as one person

9
Corporation
Ownership Start-up Costs Taxes Liability Responsibility for Decisions
Stockholders Financing generally easy to get also can acquire funds selling stock (shares of ownership) Corporation is taxed owners are also taxed on income Limited (if company loses money, stockholders only lose what they invested) Board of Directors elected by stockholders officers carry out decisions of the board
10
Corporation
Advantages Disadvantages
Limited liability Corporation doesnt end if owners sell their shares Raise more capital by selling new shares Pay more taxes More difficult to start Running it is more complicated
11
Franchise
  • A contractual agreement to sell a companys
    products or services in a designated geographic
    area

12
Franchise
Ownership Advantages Disadvantages
One or more people Easy to start Established name Must operate as franchisor wants Limited in what products or services you can offer
13
Nonprofit Organization
  • A type of business that focuses on providing a
    service rather than making a profit

14
Nonprofit Organization
Ownership Advantages Disadvantages
One or more people Doesnt have to pay taxes No profit Run by a board of directors
15
Cooperative
  • An organization owned and operated by its members
    for the purpose of saving money on the purchase
    of certain goods and services

16
Cooperative
Ownership Advantages Disadvantages
Group of people with same interest Pool resources Save money as a group Pay less in taxes than regular corporations Decisions are made as a group
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