mr. southward. sole proprietorships partnerships corporations

Business Organizations

Business OrganizationsMr. Southward3 Major TypesSole ProprietorshipsPartnershipsCorporationsEveryone will be divided into groups of 4.Each group will be given 1 of the major 3 types of Business organization. Your job as a group will be to examine that business organization in great detail and create a poster displaying the necessary information.

What is NeededExplain the details of WHAT that type of business organization is focused on. Definition, Characteristics, etc.Advantages major concept with explanation of advantageDisadvantages major concept with explanation of disadvantageBold Concepts of the section (defined on your page and underlined/highlighted in some form).Sole Proprietorships (Pages 57-59)Partnerships (Pages 60-62)Corporations (Pages 62-65)

Now we will have all the other people in the room make their way around the room and fill in the information about each Business Organization.Sole ProprietorshipA business owned and run by one person and is the easiest to set up;Advantages:Ease of set upEase if managementOwner receives all profitsNo separate business taxesPsychological satisfactionEase of getting outDisadvantages:Unlimited LiabilityDifficult to raise financial capitalSmall size and lack of efficiencyLimited managerial experienceDifficult to attract qualified employeesLimited lifePartnershipsBusiness jointly owned by two or more persons; Types include general, limited, and limited Liability;Advantages:Ease of establishmentEase of managementNo special taxesEasier financial capitalSlightly larger sizeEasier to attract qualified employees

Disadvantages:Each partner is fully responsible for other partnersLimited lifePotential for conflict

CorporationsA business recognized by law as its own legal entity; therefore the owners and operators are separate;AdvantagesEase of raising financial capitalHiring professional managersLimited liability of ownersUnlimited life

DisadvantagesDifficulty and expense of getting a charterOwners have little or no say in the operationsDouble TaxationMore government regulations due to size.Business GrowthBusinesses can grow in one of two ways: reinvesting profits or a merger a combination of 2 or more businesses to create a single business.ReinvestmentInvesting in factories, machines and new technologies to promote growth.Process of examining your net income (subtracting expenses from revenues) and coming to the cash flow, or the measure of profits for the business, to establish money that can be reinvested.Why MergeGrowth at a quicker rateDevelopment of better efficiencyTo help with the production of a better productA process to eliminate a rivalFor just a change of an imageMergers and other Business OrganizationsI would like for you to create a collage of pictures which will represent all the types of mergers and other business organizations.For each type, draw and label the picture and then provide a quick 1-2 sentence explanation of how your picture displays the concept.Pages 71 - 78Horizontal MergerVertical MergerConglomerateMultinationalConsumer CooperativesService CooperativesProducer CooperativesLabor UnionsProfessional AssociationsBusiness AssociationsExamplesHorizontal Merger United and Continental AirlinesVertical Merger If Ford were to merge and a parts companyConglomerate If Nike were to merge with 3MMultinational McDonalds

Consumer Cooperative Puget Consumers Coop (also Credit Unions)Service Cooperative Management AgenciesProducer Cooperative Seen in farm commodities Labor Unions United Steel Workers

Professional Association American Psychological AssociationBusiness Associations AFL/CIODirect Role of the GovernmentSome government agencies produce and distribute goods and services just like any other corporation.Examples would be US Postal Service, Police, Fire Protection, etc.All ways provide a direct aspect of the productive processIndirect Role of the GovernmentActing as an umpire/regulating force for all businesses and consumers.Also when government provides help/money to those in need in particular situations; student loans, Social Security, etc.