Name___________________

BUSINESS OWNERSHIP AND OPERATIONS

Pg 1A+B from PowerPoint #6, Pg 2 A+B from Internet Research

DEFINITIONS:
3 types of business ownership:
1.

Sole proprietorship- One Owner in the Business

Unlimited liability- 100% Responsible for the business, can legally be held personally
responsible

2. Partnership- 2 or more owners in the business

3. Corporation- A legal entity in itself- Owners are stockholders in the business
Stock- Shares of ownership in the business
Limited liability- Liability is only the amount you have invested in the business>stock

Franchise- A chain of a business that is for sale

A franchise is a right granted to an individual or group to market a company's
goods or services within a certain territory or location

Nonprofit organization- Business type where profits must go back into the business to provide
services to the community.
Cooperative- A legal group that is formed to benefit a certain type of business.
Example: Orange growers/farmers in Florida creating their own produce company
4 Types of Business:
1. Producer- a business that gathers raw products in nature from land or water
2. Processors- a business that changes raw materials into more finished products
3. Manufacturers- a business that makes finished products out of processed goods
4. Intermediary- a business that moves goods from one business to another

A. Wholesaler- buys goods from a manufacturer and in large quantities to sell to their
customers which is usually other businesses (retail)
B. Retailer- purchases goods from a wholesaler and resells them to the consumer
DISCUSSION QUESTIONS
**I WILL GIVE YOU THE ANSWERS ON THE LEGAL DOCUMENTS FOR EACH**
SOLE PROPRIETORSHIP- LIST ADVANTAGES AND DISADVANTAGES
A) 100 % Profit, be your own boss, easy to create, lower taxes
D) 100% liability and risk, long hours, lack of management skills

**LEGAL DOCUMENTS TO START BUSINESS:

Assumed Name Certificate from the county
Social Security # or Tax ID
PARTNERSHIP- LIST ADVANTAGES AND DISADVANTAGES
A) Shared responsibility and risk
B) Still responsible for business, shared profits
**LEGAL DOCUMENTS TO START BUSINESS:
Partnership Agreement Legal agreement created by a lawyer
Tax ID
CORPORATION- LIST ADVANTAGES AND DISADVANTAGES
A) Limited Liability, Share responsibility, Easier to get financing from a bank
B) Profits are limited to how many shares of stock you own in the company, Higher Taxes
(Double Taxation), Slower moving company- must get approval from Board of Directors.

**LEGAL DOCUMENTS TO START BUSINESS:

Corporate Resolution from the state
Articles of Incorporation- will list the board members of the corporation
Tax ID

Name_______________________

(SELECT 2- 1st choice pg 1, 2nd choice pg 2)

FRANCHISE RESEARCH (1st choice)

www.entrepreneur.com/franchise
FRANCHISE- an authorization to sell a company's goods or services in a particular place.
A BUSINESS THAT IS FOR SALE (Profits are shared through Fees and Royalty %)

Pick a franchise that you would like to purchase and do research on that franchise.
You must also pick a location that you are familiar with and make sure that franchise
is offered in your area.
FRANCHISE:________________________________
Look at top 100 franchises in this website for an idea.
Why did you pick that franchise?

Where would you have that business?

Who would be your competition in that area?

Why would your business be successful in that area?

What is the start up cost to purchase that franchise?

How does this franchise compare with others when it comes to growth and profit
within the last 5 years.

FRANCHISE RESEARCH (2nd choice)

www.entrepreneur.com/franchise
FRANCHISE- an authorization to sell a company's goods or services in a particular place.
A BUSINESS THAT IS FOR SALE (Profits are shared through Fees and Royalty %)

Pick a franchise that you would like to purchase and do research on that franchise.
You must also pick a location that you are familiar with and make sure that franchise
is offered in your area.
FRANCHISE:________________________________
Look at top 100 franchises in this website for an idea.
Why did you pick that franchise?

Where would you have that business?

Who would be your competition in that area?

Why would your business be successful in that area?

What is the start up cost to purchase that franchise?

How does this franchise compare with others when it comes to growth and profit
within the last 5 years.