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)