Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the...
-
Upload
gerald-walters -
Category
Documents
-
view
217 -
download
0
Transcript of Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the...
![Page 1: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/1.jpg)
Business Ownership and Operations
Intro To BusinessChapter 6
![Page 2: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/2.jpg)
Learning Targets
Section 6.1 – Types of Business Ownership› Describe the advantages and
disadvantages of the three major forms of business organizations
› Describe how cooperatives and nonprofits are like and unlike corporations and franchises
![Page 3: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/3.jpg)
6-1
Types of Business Ownership
Sole Proprietorship› A business owned by one person. Three-
quarters of all businesses in the U. S. take this form of organization
› Advantages: Easy to do (licenses/permits) In charge of their business Can make all of the decisions Can keep all of the profits Usually have lower taxes (taxed once)
![Page 4: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/4.jpg)
Types of Business Ownership› Disadvantages:
Unlimited liability The owner is responsible for the company’s debt’s.
If the owner has more debt than they receive, the owner has to make up the difference.
![Page 5: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/5.jpg)
Types of Business Ownership
Partnership› A business owned by two or more people
who share its risks and rewards.› Advantages:
Easy to start Easier to obtain capital Banks are often more willing to lend money Taxed only once Each partner brings specific skills and talents
![Page 6: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/6.jpg)
Types of Business Ownership› Disadvantages
All of the partners share the risk Problems with partners getting along Unlimited Liability
Corporation› Company that is registered by a state and
operates apart from its owners› To raise money, the owners can sell stock
or shares of the company
![Page 7: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/7.jpg)
Types of Business Ownership› Advantages
Limited Liability Holds a firms owners responsible for no more than
the capital that they have invested in it. Ability to raise money by selling stock Company does not end if an owner dies
› Disadvantages Double taxes Extra governmental restrictions More difficult and costly to start
![Page 8: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/8.jpg)
6-1
Types of Business Ownership
Other ways to Organize a Business› Cooperative
An organization that is owned and operated by its members When a group of businesses pool their resources Purpose – to save money on the purchase of certain goods and
services Ex. Ocean Spray› Nonprofit Organization
Type of organization that focuses on a providing a service, but not to make a profit.
Must register with the government. Because they do not make a profit they do not pay taxes. Ex. Churches
› Franchise A contractual agreement to use the name and sell the products or
services of a company in a designated area Ex. McDonalds, Tim Horton’s You have to invest money and pay franchise fees or share the
profits.
![Page 9: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/9.jpg)
6-1
Questions/Reflection
1. What is the difference between a sole proprietorship and a partnership?
2. If a partner makes a bad decision, what responsibility do the other partners have?
3. Why are cooperatives formed?4. Compare limited liability and unlimited
liability.
![Page 10: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/10.jpg)
Learning Targets
Section 6.2 – Types and Functions of Businesses› Differentiate the six types of businesses› Describe the five functions of business› Discuss how the five functions of business
relate to each other
![Page 11: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/11.jpg)
6-2
Types and Functions of Businesses
Types of Business› Producers
Business that gathers raw goods Agriculture, mining, fishing, and forestry
› Processors Changes raw materials into more finished products Made from raw goods that require further
processing Crude oil to gasoline, iron ore into steel
› Manufacturers Makes finished products out of processed goods Cars, CD’s, Computers
![Page 12: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/12.jpg)
Types and Functions of Businesses
Intermediaries and Wholesalers› Intermediary – A business that moves
goods from one business to another Buys goods, stores them and resells them
› Wholesaler – Distributes goods Retailers and Service Businesses
› Retailer – Purchases goods from wholesaler and sells them to consumer
› Record stores and auto dealers
![Page 13: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/13.jpg)
Types and Functions of Businesses
Functions of Business› Production and Procurement
Production – Process of creating, expanding, manufacturing or improving goods and services
Procurement – The buying and reselling of goods that have already been produced.
› Marketing Process of planning, pricing, promoting, selling
and distributing ideas, goods, and services Getting consumers to buy the product
![Page 14: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/14.jpg)
Types and Functions of Businesses› Management
The process of achieving company goals by planning, organizing, directing, controlling and evaluating the effective use of resources.
› Finance and Accounting Finance – The business or art of money
management Requires analyzing financial statements to make
future decisions Accounting – Maintaining and checking
records, handling bills and preparing financial reports for a business.
![Page 15: Section 6.1 – Types of Business Ownership › Describe the advantages and disadvantages of the three major forms of business organizations › Describe.](https://reader030.fdocuments.in/reader030/viewer/2022012918/56649d745503460f94a54373/html5/thumbnails/15.jpg)
Questions
What is the difference between a producer and a processor?
Identify the five functions of business. Give an example of how the accounting
and finance functions can affect a business’s marketing and production processes.