Handout of Additional Information Liability is for which anything a company owes. Specialized Partners 1.

Dormant partner plays no role and is not known to the public. 2. General partner plays an active role and has unlimited liability (every partnership must have at least one general partner). 3. Limited participate as investors and have limited liability. 4. Secret partner plays an active role but is secret from society. 5. Silent partner does not have an active role but is known to the public.

Franchise Formats 1. Business-format franchise requires franchisee to sell products or service in a specific format. Examples Jackson-Hewitt Tax Services Burger King Firestone Tires 2. Product-trade franchise allows franchisee to sell specific products. This format is usually formed by automobile, appliance, and petroleum product. Examples Marc Jacobson Toyota Bobbys Appliance store Local stores selling Shell brand of gasoline Types Corporations 1. Domestic corporations are chartered in a specific state. 2. Foreign corporations are chartered in one state but doing business in another state. 3. Alien corporations are chartered in another nation but doing business in a state. 4. Public corporations are established for governmental purposes. 5. Private corporations are established by individuals for business or charitable purposes.

6200/6600 Principles of Business and Finance

Summer 2010

Page 86

Name_________________________ Class _________________ Date _________ 2.01 Types of Business Ownership Brochure Activity Directions: Use appropriate software to make a brochure featuring the types of business ownerships. Brochure Template Describe the types of specialized partnerships and corporations Describe the types of corporations Describe cooperative Describe franchise and the formats Corporation x x x x x x x x x x How many owners? Who manages? How is business started? 2 Advantages 2 Disadvantages Limited or unlimited liability Example How is ownership terminated? Sources of investment 2 Examples-texts, symbols, or pictures Partnership x x x x x x x x x x x How many owners? Kinds of partners Who manages? How is business started? 2 Advantages 2 Disadvantages Limited or unlimited liability Example How is ownership terminated? Sources of investment 2 Examples-texts, symbols, or pictures Business Quote Proprietorship x x x x x x x x x x How many owners? Who manages? How is business started? 2 Advantages 2 Disadvantages Limited or unlimited liability Example How is ownership terminated? Sources of investment 2 Examples-texts, symbols, or pictures Name Date Period Class Title

Picture

6200/6600 Principles of Business and Finance

Summer 2010

Page 87

Name_________________________ Class _________________ Date _________ 2.01 Types of Business Ownership Key Terms Crossword Puzzle Directions: Fill in the crossword puzzle using the provided definitions.

6200/6600 Principles of Business and Finance

Summer 2010

Page 88

Types of Business Ownership Key Terms Crossword Puzzle Continued Across 5. Two or more persons to carry on as co-owners of a business for a profit. 9. Each stock equals one _______ at the shareholder meeting. 10. Type of liability in which you can lose all your assets. 16. Formed by the way two or more people conduct their business (4 words). 17. Entity with the legal authority to act as a single person. 18. Partner has an active role, but unknown existence. 19. Grants permission to sells its products and services as a business. Down 1. Business owned by one person (two words). 2. Partnership formed after they agree to conditions in a contract (two words). 3. Type of corporation that benefits the public and receives a tax break. 4. Abbreviation for a partnership with limited liability. 6. Partner has no role, but is known to public. 7. Type of taxation on a corporation. 8. Type of liability in which you only lose your initial investment in the company. 11. Partner plays no role and is not known to public. 12. __________ of incorporation. 13. Partner has an active role, unlimited liability. 14. Formed by a group to gain bargaining power. 15. __________venture is a special project for a limited time.

6200/6600 Principles of Business and Finance

Summer 2010

Page 89

Name_________________________ Class _________________ Date _________ Best Form of Business Activity Directions: Read the scenarios and provide responses in your own words to the questions in the spaces provided. Scenario 1 Mary makes jewelry for her own business named The Design For You. She needs help in completing orders to make necklace and earring sets in a timely manner. Mary prefers working alone at her own pace. Marys cousin named Greg has expressed interest in starting a business too. He likes using his hands, designing things, and has access to jewelry making tools too. 1. Should Mary hire Greg to help her make the orders for jewelry or form a partnership with him? __________________________________________________________ 2. Compare the advantages and disadvantages of hiring Greg and remaining as a sole proprietorship. ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 3. Compare the advantages and disadvantage of forming a partnership with Greg ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ Scenario 2 Teri enjoys assisting other students with their homework. Her neighbor named Francis volunteers in assisting younger students with their homework in an after school program. Teri and Francis talked about forming a partnership and expanding their services. 1. Should Teri and Francis form a partnership? _______________________________ 2. Compare the advantages and disadvantages of them forming a partnership ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 91

Best Form of Business Activity Continued Jade and John own and operate several ice cream stores. Jade is interested in expanding the business by offering additional services and opening more locations. John reminded Jade that they will need more resources in order to expand. Jade suggested that they offer shares to relatives to finance the expansion. 1. Should Jade and John form a corporation? ________________________________ 2. Compare the advantages and disadvantages of them forming a corporation. ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 92

Name_________________________ Class _________________ Date _________ Sole-Partners-Corporate Activity Directions: Work as a sole proprietor, partnership, or corporation to provide responses to the scenarios in the space provided. Be prepared to present your findings. Sole Proprietorship Scenario Mary Jones operates her own staffing agency. Mary has about 30 steady employers that request her services to send temporary workers for various jobs. She handles all the financial, advertising, operations, and management issues for the agency. Mary used a gift of $10,000 from her grandmother to start the agency. She would like to expand the agency. She uses all her profit to sustain her personal living arrangements. After seven days of constant rain, Mary realized soon after the rainy days that water is leaking from several places of the roof. She is planning to borrow money to have the roof repaired. Complete the table using information from the scenario Type Sole Proprietorship Owner(s) Manager(s) Advantage(s)

Disadvantage(s) Source(s) of investment Other information Consider the responses to the above items, what should the business owner do with the business? Why?

6200/6600 Principles of Business and Finance

Summer 2010

Page 93

Name_________________________ Class _________________ Date _________ Sole-Partners-Corporate Activity Directions: Work as a sole proprietor, partners, or corporation to provide responses to the scenarios in the space provided. Be prepared to present your findings. Partnership Scenario Max and Tim enjoy skiing so much that they are thinking about opening a ski resort. Max recently inherited about 100 acres of land in the mountains. This amount of land will easily accommodate a ski resort. Tim has about $30,000 in his saving account. Tims neighbor operates a successful business. Both of them have limited knowledge about operating a business. They talk about offering ski slopes, equipment, housing, food, and entertainment at the resort. Max may have to continue working his full-time job as a teacher even once they opened the resort. Tim is ready to quit his job as an attorney right away and start the business. Complete the table using information from the scenario Type Partnership Owner(s) Manager(s) Type of partners should be considered

Advantage(s) Disadvantage(s) Source(s) of investment Other information Consider the responses to the above items, what should they with their resources and desire to open the ski resort? Why?

6200/6600 Principles of Business and Finance

Summer 2010

Page 94

Name_________________________ Class _________________ Date _________ Sole-Partners-Corporate Activity Directions: Work as a sole proprietor, partners, or corporation to provide responses to the scenarios in the space provided. Be prepared to present your findings. Corporation Scenario A company wants to expand to several other cities. The board of directors proposed the option of selling 300 more shares to obtain the funds. The company stock value has decreased about 1% over the past year. The corporation has earned an average profit of over $40,000 for the past three years. Complete the table using information from the scenario Type Corporation Owner(s) Manager(s) Advantage(s)

Disadvantage(s) Source(s) of investment Other information Consider the responses to the above items, should the company pursue its expansion plans? Why?

6200/6600 Principles of Business and Finance

Summer 2010

Page 95