Corporations

A corporation is a kind of business organization made up of a number of people who, according to law can act as a single person. Corporations account for approximately one-fifth of the firms in the United States and about 90% of all sales. A corporation is a form of business organization recognized by law as a separate legal entity having all the rights of an individual. This status gives the corporation the right to buy and sell property, enter into legal contracts, and to sue and be sued.

Some of the advantages of corporations include:

• ease of raising capital
• owners have limited liability
• business’s life is unlimited

Some of the advantages of corporations include:

• charter is expensive
• corporate income is taxed twice
• subject to government regulation.

Objectives:

• Describe the characteristics of a corporation
• Explain some of the advantages and disadvantages of a corporation

Here is a link to a resource that explains how to form a corporation, advantages, and disadvantages.

Homework: Find an article and write a summary - business organization (sole-proprietorship, partnership, corporation) problems (lawsuit, takeover, stock issues, etc.) due Wednesday the 28th.

Business Organization

If you’ve ever sold lemonade or provided yard care for money, you’ve been an entrepreneur.  If you had a partner, how was the money and work divided?

There are three major forms of business organization:

• sole-proprietorship
• partnership
• corporation

Each form of business organization has its advantages and disadvantages. In today’s class, we examined the sole-proprietorship.

Objectives:

• Describe the characteristics of the sole-proprietorship
• Undestand the advantages and disadvantages of sole-proprietorships

Sole-proprietorships are businesses run by one person. While the smallest type of business organization in size, they are the most numerous. Advantages of the sole-proprietorship include:

• easy to start
• owner controls all profit
• owner is main decision maker
• taxes apply to personal income tax (no business tax)

Disadvantages include:

• unlimited liablity
• business has limited life
• more difficult to raise financial capital
• more difficult to attract highly qualified personnel

Here’s a quick overview regarding sole-proprietorships. An overview of legal liability for sole-proprietorships.

Homework: Choose one initiative from yesterday’s exercise. Decide either to support or oppose it. Construct a four (or more) paragraph essay defending your position. (Due Monday the 26th)