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    Chapter 4 Choosing A Form of Business Ownership

    Uploaded by

    Pete Joempraditwong
    The document discusses three main forms of business ownership: sole proprietorships, partnerships, and corporations. It provides details on the characteristics of each, including advantages and disadvantages. Sole proprietorships are owned by one person, partnerships involve two or more owners, and corporations separate ownership and control through stockholders and a board of directors.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Chapter 4 Choosing A Form of Business Ownership

    Uploaded by

    Pete Joempraditwong
    231 views24 pages
    The document discusses three main forms of business ownership: sole proprietorships, partnerships, and corporations. It provides details on the characteristics of each, including advantages and disadvantages. Sole proprietorships are owned by one person, partnerships involve two or more owners, and corporations separate ownership and control through stockholders and a board of directors.

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    intro bus

    Original Title

    Chapter 4 Choosing a Form of Business Ownership

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    The document discusses three main forms of business ownership: sole proprietorships, partnerships, and corporations. It provides details on the characteristics of each, including advantages and disadvantages. Sole proprietorships are owned by one person, partnerships involve two or more owners, and corporations separate ownership and control through stockholders and a board of directors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    231 views24 pages

    Chapter 4 Choosing A Form of Business Ownership

    Uploaded by

    Pete Joempraditwong
    The document discusses three main forms of business ownership: sole proprietorships, partnerships, and corporations. It provides details on the characteristics of each, including advantages and disadvantages. Sole proprietorships are owned by one person, partnerships involve two or more owners, and corporations separate ownership and control through stockholders and a board of directors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 24
    At a glance
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    The key takeaways are that there are three main forms of business ownership - sole proprietorships, partnerships, and corporations - and each have their own advantages and disadvantages.

    The three main forms of business ownership discussed are sole proprietorships, partnerships, and corporations.

    Advantages of a sole proprietorship include ease of start-up and closure, pride of ownership, retention of all profits, and flexibility of being your own boss. Disadvantages include unlimited liability, lack of continuity, lack of money, and limited management skills.

    Chapter 4

    Choosing a Form of Business Ownership


    MGT1101 Introduction to Business
    Learning Objectives
    For Chapter 4

    1. Describe the advantages and disadvantages of sole


    proprietorships.
    2. Explain the different types of partners and the importance of
    partnership agreements.
    3. Describe the advantages and disadvantages of
    partnerships.
    4. Summarize how a corporation is formed.
    5. Describe the advantages and disadvantages of a
    corporation.
    Chapter 4 MGT1101 Introduction to Business
    Refer to page 100

    3 Forms of Business Ownership


    classified by legal perspective

    1 Sole Proprietorship

    2 Partnership

    3 Corporation

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 102
    3 Forms of Business Ownership
    classified by legal perspective

    • A business that is owned by one


    1 Sole Proprietorship person
    • The simplest form
    • Many large businesses began as a
    small
    2 Partnership

    3 Corporation

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 102-105
    3 Forms of Business Ownership
    classified by legal perspective

    • A business that is owned by one


    1 Sole Proprietorship person
    • The simplest form
    • Many large businesses began as a
    small
    2 Partnership

    • Advantages
    3 Corporation 1. Ease of start-up and closure
    2. Pride of ownership
    3. Retention of all profits
    4. Flexibility of being your own boss

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 102-105
    3 Forms of Business Ownership
    classified by legal perspective

    • A business that is owned by one


    1 Sole Proprietorship person
    • The simplest form
    • Many large businesses began as a
    small
    2 Partnership

    • Disadvantages
    1. Unlimited liability
    3 Corporation
    A legal concept that holds a business
    owner personally responsible for all the
    debts of the business
    2. Lack of continuity
    3. Lack of money
    4. Limited management skills
    Chapter 4 MGT1101 Introduction to Business
    Refer to page 105-106
    3 Forms of Business Ownership
    classified by legal perspective

    • A voluntary association of two or more


    1 Sole Proprietorship persons.
    • No legal limit on the maximum number
    of partners; most have only two
    • Partnerships are usually a pooling of
    2 Partnership special talents

    3 Corporation

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 105-106
    3 Forms of Business Ownership
    classified by legal perspective

    • A voluntary association of two or more


    1 Sole Proprietorship persons.
    • No legal limit on the maximum number
    of partners; most have only two
    • Partnerships are usually a pooling of
    2 Partnership special talents

    Types of Partner
    3 Corporation General partner: A person who assumes full or
    shared responsibility for operating a business

    Limited partner: A person who contributes capital to


    a business but has no responsibility or liability for
    losses beyond the amount he or she invested in the
    partnership

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 106-109
    3 Forms of Business Ownership
    classified by legal perspective

    • A voluntary association of two or more


    1 Sole Proprietorship persons.
    • No legal limit on the maximum number
    of partners; most have only two
    • Partnerships are usually a pooling of
    2 Partnership special talents

    Advantages
    3 Corporation 1. Ease of start-up
    2. Availability of capital and credit
    3. Combined business skills and knowledge
    4. Retention of profits

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 106-109
    3 Forms of Business Ownership
    classified by legal perspective

    • A voluntary association of two or more


    1 Sole Proprietorship persons.
    • No legal limit on the maximum number
    of partners; most have only two
    • Partnerships are usually a pooling of
    2 Partnership special talents

    Disadvantages
    3 Corporation 1. Unlimited liability
    2. Management disagreements
    3. Lack of continuity
    4. Frozen investment

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 109
    3 Forms of Business Ownership
    classified by legal perspective

    The business entity that separates


    1 Sole Proprietorship ownership and control
    • Ownership: Stockholders
    • Control: Board of director

    2 Partnership

    3 Corporation

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 110-112
    3 Forms of Business Ownership
    classified by legal perspective

    The business entity that separates


    1 Sole Proprietorship ownership and control
    • Ownership: Stockholders
    • Control: Board of director

    2 Partnership

    3 Corporation
    Hierarchy of Corporate Structure

    Chapter 4 MGT1101 Introduction to Business


    Refer to page 113-116
    3 Forms of Business Ownership
    classified by legal perspective

    The business entity that separates


    1 Sole Proprietorship ownership and control
    • Ownership: Stockholders
    • Control: Board of director

    2 Partnership
    Advantages
    1. Limited liability
    Each owner’s financial liability is limited to
    3 Corporation the amount of money that he or she has
    paid for the corporation’s stock
    2. Ease of raising capital
    3. Ease of transfer of ownership
    4. Perpetual life
    5. Specialized management
    Chapter 4 MGT1101 Introduction to Business
    Refer to page 113-116
    3 Forms of Business Ownership
    classified by legal perspective

    The business entity that separates


    1 Sole Proprietorship ownership and control
    • Ownership: Stockholders
    • Control: Board of director

    2 Partnership
    Disadvantages
    1. Difficulty and expense of formation
    3 Corporation 2. Government regulation and increased
    paperwork
    3. Conflict within the corporation
    4. Double taxation
    5. Lack of secrecy

    Chapter 4 MGT1101 Introduction to Business


    Example
    Proctor and Gamble
    Proctor and Gamble

    1. About company: The Introduction


    an American corporation headquartered
    in Cincinnati, Ohio
    manufactures a wide range of consumer
    goods
    widely recognized as the industry’s global
    innovation leader.
    P&G headquarter

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    2. Product Categories or Product Lines
    Proctor
    There are and
    two product linesGamble
    1. Beauty and Grooming
    2. Household Care

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    Proctor and Gamble

    Product Categories: 1. Beauty and Grooming

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    Proctor and Gamble

    Product Categories: 1. Beauty and Grooming

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    Proctor and Gamble

    Product Categories: 2. Household Care

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    Proctor and Gamble

    Product Categories: 2. Household Care

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    Proctor and Gamble
    3. History
    WAS FOUNDED IN 1837 BY TWO MEN WHO MET BY CHANCE

    William Procter James Gamble


    •from England •from Ireland
    •Candle maker •a soap maker

    • The two might never have met had they not married sisters Olivia and Elizabeth
    Norris, whose father convinced his new sons-in-law to become business partners.
    • After several years, the sons agreed and on October 31, 1837,

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    Proctor and Gamble
    4. Form of Business Ownership
    • As a partnership in 1837
    – They signed the partnership agreement that founded the Procter & Gamble
    Company.
    • Corporation:
    – Jan. 02, 1970, P&G stocks are traded in New York Stock Exchange (NYSE)
    – Separation of ownership and control

    Discussion 2 (Chapter 4) MGT1101 Introduction to Business


    THANK YOU!
    THANK YOU!

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