Chapter 35: Forms of business organization. What are the major forms of business organization, and what are the differences among them? What are the specialized forms of business organization? What is a franchise? | Chapter 35 Forms of Business Organization Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 35: Forms of Business Organizations 35- Major Forms of Business Organizations Sole Proprietorship General Partnership Limited Partnership Corporation Major forms of business organizations include the sole proprietorship, the general partnership, the limited partnership, and the corporation. 35- Sole Proprietorship Definition: Unincorporated business owned by one person Owner has total control Owner has unlimited liability Profits taxed directly as income to sole proprietor A sole proprietorship is an unincorporated business owned by one person. With the sole proprietorship form of business organization, the owner has total control, unlimited liability, and profits are taxed directly as income to the sole proprietor. 35- Advantages and Disadvantages of Sole Proprietorship Advantages Ease of creation (“start-up”) Owner has total managerial control Owner retains profits Disadvantages Personal liability for all business debts/obligations Funding limited to personal contributions and loans Sole proprietorship advantages include ease of creation or “start-up,” the owner has total managerial control, and the owner retains profits. The sole proprietorship also has its disadvantages, however, including personal liability for all business debts and obligations, and funding is limited to personal contributions and loans. 35- General Partnership Definition: Unincorporated business owned and operated by two or more persons Each partner has equal control of business Each partner has unlimited, personal liability for business debts/obligations Profits taxed as income to partners A general partnership is an unincorporated business owned and operated by two or more persons. Each partner has equal control of the business, and unlimited, personal . | Chapter 35 Forms of Business Organization Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 35: Forms of Business Organizations 35- Major Forms of Business Organizations Sole Proprietorship General Partnership Limited Partnership Corporation Major forms of business organizations include the sole proprietorship, the general partnership, the limited partnership, and the corporation. 35- Sole Proprietorship Definition: Unincorporated business owned by one person Owner has total control Owner has unlimited liability Profits taxed directly as income to sole proprietor A sole proprietorship is an unincorporated business owned by one person. With the sole proprietorship form of business organization, the owner has total control, unlimited liability, and profits are taxed directly as income to the sole proprietor. 35- Advantages and Disadvantages of Sole .
