‭Types of Businesses‬

‭Module 20‬

‭ onprofit Organization‬ ‭- 1. A legal entity formed‬‭to carry out a “not-for-profit” mission.‬

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‭Partnership‬ ‭- 2. A for-profit business firm owned‬‭by two or more people, each of whom has a financial‬
‭interest in the business.‬
‭Business Franchise‬ ‭- 3. Consists of a parent company‬‭and numerous associated businesses that sell a‬
‭standardized good or service.‬
‭Sole Proprietorship‬ ‭- 4. A business firm owned by‬‭one person, the proprietor.‬
‭Corporation‬ ‭- 5. A business firm that is itself‬‭a legal entity.‬
‭Limited Liability Company (LLC)‬ ‭- 6. A hybrid business‬‭organization that combines features of‬
‭corporations, partnerships, and sole proprietorships.‬
‭Cooperative‬ ‭- 7. A business owned by its members‬‭and operated in order to supply members and others‬
‭with goods and services.‬
‭Corporate Bond‬ ‭- 8. A contract between a corporation‬‭and the owner of the bond that obligates the‬
‭corporation to pay the bond’s owner a certain amount of money in the future.‬

‭Form of Organization‬ ‭Advantage or Disadvantage‬

‭1. Safety of personal assets.‬ ‭Sole Proprietorship‬‭*Corporation‬ ‭Advantage‬

‭ . Satisfaction in knowing that‬

2 ‭Partnership‬‭*Sole Proprietorship‬ ‭Advantage‬
‭your efforts are rewarded.‬

‭ . More reporting‬
3 ‭Corporation‬ ‭Disadvantage‬
‭requirements.‬

‭ . Not having to share‬

4 ‭Sole Proprietorship‬ ‭Advantage‬
‭(after-tax) profits with anyone.‬

‭ . Difficulty raising money to‬

5 ‭Sole Proprietorship‬ ‭Disadvantage‬
‭start and operate a business.‬

‭ . Shared decision making and‬

6 ‭Partnership‬ ‭Advantage‬
‭easy to start-up.‬

‭Type of Business Organization‬

‭ . A new start-up company wants to launch a‬

1 ‭Corporation‬
‭national chain of health-food stores.‬

‭ . A recent cooking-school graduate wants to‬

2 ‭Sole Proprietorship‬‭*Corporation‬
‭start a national chain restaurant.‬
‭ . An author decides to write a sequel to her‬
3 ‭Corporation *‬‭Sole Proprietorship‬
‭latest best-selling book.‬

‭ . A group of friends decides to start a business‬

4 ‭Sole Proprietorship‬
‭without going through a lengthy legal process.‬

‭ . A group of farmers want to save money on‬

5 ‭Partnership‬
‭fertilizer, seeds, and other related materials by‬
‭buying them in bulk and dividing the cost among‬
‭the members of the group.‬

‭ . A handyman decides to quit his job in a‬

6 ‭Sole Proprietorship‬
‭factory and start his own home repair business.‬
‭He is very concerned about protecting his home‬
‭and personal assets from being exposed to any‬
‭business-related liability.‬