I.

Sole Proprietorship
!! Business owned and ran by 1

person

!! Easiest type of business to start !! Simple fees and licenses !! Advantage: make all decisions,

keep all the $$$, easily stopped or dissolved EVERYTHING !! Difficult to raise capital, limited life, unlimited liability (owner responsible for all losses/debts)

!! Disadvantage: could lose

II. Partnership
!! Business owned by 2 or more persons !! Smallest amount in USA !! Articles of Partnership need to be signed to

start

!! Contract between partners !! Who does what

!! Advantage: easy to manage with partner !! More efficient than sole proprietorship, $$$ more easily attained !! Disadvantage: responsible for your partner !! Conflict between partners, limited life

III. Corporation
!! Big business with legal rights !! Government has to approve a charter !! Stockholders own part of corporation !! Advantages: limited losses & liability
!! Stockholders only lose the money they

paid, ownership is easily transferred

!! Disadvantage : pay higher taxes

!! Hard to get a charter, expensive !! Stockholders have little say on how

corporation is run !! Subject to more govt. regulation

Corporation Structure
Stockholders Owners who elect the

Board of Directors who selects the

President who hires the

Vice President

BUSINESS SIMULATION
Today in class you will create 1 of the 3 types of businesses we have learned about. With a group you will together create a proprietorship, partnership, or corporation. You will have to address the following questions/guidelines for the activity. ANSWER THIS ON A SEPARATE PIECE OF PAPER!
1.!

What type of business is it? (proprietorship, partnership, corporation)

!! explain why you picked the organization you did. !! Why a proprietorship? Why did you think having a single owner is the best. !! Why a partnership? How much of a role does each partner play (70%/30%) !! Why a corporation? How is the corporation set up?

BUSINESS SIMULATION
2.! 3.! 4.! 5.! 6.!

What are you selling/producing? Who are your target customers or buyers? (age/ gender/ethnicity/class) What are 2 advantages related to your business organization? What are 2 disadvantages related to your business organization? Write a request for a Business License(proprietorship), develop a Partnership Agreement/Contract (partnership), or Articles of Incorporation (corporation) for your business.
!! use 1 piece of paper to this. Make it look professional.

7.!

Create an Advertisement for your business. (tv commercial, billboards, magazine, newspaper, etc.)