Activator – Chapter 8Write down three occupations that you’re considering for your future. Categorize each of your choices based on who your employer might be for each job.

Job Employer1.2.3.

Chapter 8 - Business Organizations

Business organization (firm) –establishment formed to carry on a commercial enterprise. 3 types - Sole proprietorship, partnership, corporation Each has different levels of liability (responsibility)

Liability – legal obligation to pay debts incurred by the business

Each are engaged in bringing goods, services, or both to consumers in the market

Sole proprietorship – a business owned and managed by a single individualMost common type of business organization75% of all businesses are sole proprietorships in the U.S.

Sole Proprietor

Partnership Partnership – a business organization owned by two or more persons who agree on a specific

division of responsibilities and profits Account for about 5 % of all businesses

General Partnership – partners share equal liability and responsibility Doctor’s lawyers, accountants, small family businesses

Limited Liability Partnership – all partners are limited from personal liability, in the case of another partners mistakes. Legal buffer from personal liability

Articles of Partnership – outline the agreements between partners.

CorporationCorporation – is a separate legal entity, or legal being, owned by individual

stockholders, each of whom faces no liability for the firm’s debtStock – a certificate of ownership in a corporation

Partial owner , i.e. 1000 shares, purchase 1, 1/1000th owner of the company

Corporation has a separate legal identity, an entity separate from its owners

Account for 20% of all businesses, but 90% of all products sold

CorporationClosely held – privately held corporations, that do not

trade stock on the public exchangePublicly held – sells stock on the market to investors in

order to grow the business

Other Organizations Business Franchise – semi-independent business that pays fees and royalties to

a parent company Business is granted right to sell using the name, product and brand of the

company Zaxbys, McDonalds, Subway, etc.

Cooperative – Co-0ps, business organization owned and operated by a group of individuals for their shared benefit

MergersMerger – combine with another company to become one entityHorizontal merger – firms in the same market with a similar good

or service mergeVertical merger –firms involved in producing different goods or

services mergeConglomerates – business mergers with more three or more

businessesMultinationals – large corporation that produces and sells its

goods and services throughout the world

Other Organizations Nonprofit Organizations – business that gears towards benefiting society (philanthropy) Business Organization – promote the business interests of an area

Better Business Bureau Labor Unions – organized group of workers whose aim is to improve working conditions,

hours, wages and fringe benefits for its members.

Landinguin/Henning Jasmine GeraldNisha Hankerson Fabiana JohnsonDekel JosephTaneka MurphyTabahri NewberryShaquail BellRebecca BullardGreg BurchettDarren CowartMichael DiggsShaquail EllisMatt ForrestMinnie Gallarza Jordan Armstrong

Advantages of Sole ProprietorshipsEase of Start – Up – Small amount of paperwork and legal

expense Authorization – must obtain a business license Site Permit – operate out of the home or obtain a certificate of

occupancy for a building Name – use personal name or register business name

Relatively Few Regulations – least amount of government regulation; subject to certain health codes/zoning laws

Sole Receiver of Profit – Owner keeps all profitsFull Control – sole proprietors can do what they please with the

firmEasy to discontinue – very easy to dissolve the business

Disadvantages of Sole ProprietorshipsUnlimited Personal Liability – legally bound to debts or lawsuitsLimited Access to Resources – pay out of pocket for operating

costsLack of Permanence – business is based on the health/life of the

s.p.

Advantages of PartnershipsEase of Start – Up – easy and inexpensive to establishArticles of Partnership – spells out each partner’s rights and

responsibilities

Examples Examples Examples Examples

Sole Proprietor Corporation Corporation Business Franchise

Main Advantage Main Advantage Main Advantage Main Advantage

Main Disadvantage Main Disadvantage Main Disadvantage Main Disadvantage

3 Business Organizations Chart

Binder Check – Due Tuesday 11-11. Reflection Questions Day 22. Essential Questions (2)3. Daily Tens (7)4. Video Questions – Browser

Wars/Google5. Ch. 7 +8 Study Guide6. Ch. 7 +8 Crossword Puzzle7. Ch. 7+8 VIS Terms8. Chapter 7/8 - Notes9. Test Corrections-Standards

Sheet

Study Guide Chapter 7 + 81. Perfect/Pure competition2. Many buyers and sellers, identical products, buyers + sellers are well

informed, no barrier to entry.3. Barrier to entry4. Monopoly5. Natural6. Prices are not competitive, dictated by monopolist.7. Patent 8. Government9. License10. Price discrimination11. Market power12. Monopolistic 13. Many firms, product differentiation, low barrier to entry, little control

over price14. Running shoes, pens, cars, etc., gas station near highway, publix,

designer t-shirt

Study Guide Chapter 7 + 815. Oligopoly 16. Collusion, price fixing17. Antitrust18. Microsoft19. Business organization20. Sole proprietor21. Partnership22. General 23. Limited24. Limited liability25. Articles of partnership26. Corporation27. Sole proprietorship28. Corporation 29. Stock/share

30. Partnership 31. Sole proprietorship32. Closely 33. Publicly 34. Partnership35. Corporation 36. Multinational37. Horizontal38. Vertical39. Conglomerate 40. Franchise41. Cooperative 42. Consumer43. Service44. Producer

Extra Credit1. List the 4 market structures in

order from least competitive to most competitive.

2. What does it mean to have market power?

3. Which of the four forms of nonprice competition (physical characteristics, location, service level, image/status), would reflect the following?

a. A fast food restaurant near the beach

b. A new shape for a running shoe

c. Publix, “Where shopping is a pleasure”

d. Express brand clothing vs. Target

Essential Question #11. How do the 3 business organizations differ?

A sole proprietorship is owned and operated by ___________________

Partnerships are owned by _______________ Corporations are owned by ___________________

Essential Question #22. What are the characteristics of each market structure?

Perfect competition, products are ___________________, _____________ firms, consumers are _____________, ________________ barriers to entry.

Monopolistic competition, products are __________________, but not _________________, __________________ firms, __________________ barriers to entry.

Oligopoly, products are ________________ or _____________, and are controlled by ___________ firms. ____________ barriers to entry

Monopoly, ___________ product, controlled by ___________ firm, ______________ barriers to entry

one person

2 or more people

shareholders

identical manyinformed no

similaridentical many low

Identical similar a few high

one onecomplete