Warm ups *What three types of businesses are there? *In what ways has the job market changed in the last few decades?
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1 Warm ups *What three types of businesses are there? *In what ways has the job market changed in the last few decades?
2 Lesson Objective: *identify the three major forms of business ownership *determine when each form of ownership would be most appropriate
3 Owning a Business *chance to be in control and make decisions *investing money to try and make a profit *challenging and exciting *How many of you think you would ever like to own your own business?
4 Major Forms of Business Ownership *proprietorship: a business owned and run by just one person
5 Major Forms of Business Ownership Partnership: business owned and controlled by two or more people who have entered a written agreement
6 Major Forms of Business Ownership *corporation: a separate legal entity formed by documents filed with your state; owned by one or more shareholders, and managed by a board of directors
7 Major Forms of Business Ownership *Which type of business is the most common? *Which type of business makes the most money?
8 *What does it mean to write off expenses? Choosing a Form of Ownership *Choosing a proprietorship *don t need licenses or permits from government (easy) *total control, and working for yourself *must register the business and pay taxes on income *all income is taxed as your personal income (you can write off many business expenses)
9 Choosing a Form of Ownership *Choosing a proprietorship *personal assets are connected to the business (if the business fails, you risk losing everything you have) *Come up with a list of pros and cons of having a proprietorship.
10 Choosing a Form of Ownership *Choosing a partnership *slightly more formal and complex than a proprietorship *a partnership agreement should detail all rules and procedures for the business *must register business name and name of owners with gov. *more than one person contributing $ and ideas *assets of all partners could be taken if business fails and you have debts
11 Choosing a Form of Ownership *Choosing a corporation *most corporations are large businesses *it s becoming more popular for new and small businesses to register as corporations *subject to many laws and regulations *more difficult to start up than other types of businesses *must file articles of incorporation which is a written legal document that defines ownership and operating procedures
12 *must pay corporate taxes on profits earned and investors pay taxes on their individual earnings from the business Choosing a Form of Ownership *Choosing a corporation *must have corporate bylaws, which the corporation must follow *must have a board of directors in charge of it *issues shares of stocks to investors *can be easily expanded and gain $ to expand from new investors *decision-making is shared among shareholders
13 Specialized Partnerships and Corporations *a limited liability partnership identifies some investors that cannot lose more than they invested *a joint venture is organized and run by two or more businesses *an S-Corporation offers limited liability of a corporation, but all income is only taxed on a personal level, not as a corporation
14 Specialized Partnerships and Corporations *Limited Liability Companies (LLC) protects liability of owners, but is simpler to set up than a corporation *Nonprofit Corporation is a group of people who do something that benefits the public; free from corporate income taxes, but it can never be sold, if it dissolves, it must give its assets to other nonprofits
15 Cooperatives and Franchises *a cooperative is owned by members, serves their needs, and is managed in their interest, members form this so they gain bargaining power and can purchase goods at a cheaper rate than individuals *a franchise is a written contract granting permission to operate a business and sell products in a set way
16 Owning a Business *Which type of business do you think would be the best for you? Why?
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