CAREER AND FINANCIAL MANAGEMENT

Business Organization

Business Organization

Most large business start with a single person or as a partnership

This is due to the high start up cost and uncertainty if the business will be successful

Sole Proprietorship

Sole Proprietorship- a business that is owned by one person. The owner is responsible for all debts (losses) and liabilities.

Liability- a legal obligation

Partnership

Multiple people (2 or more) equally share the responsibilities of a business.

Still responsible for all debts Share profits equally Share responsibility for all liability.

Corporation

Most common form of business organization. In this model the owners have limited liability.

Limited Liability- the owners cannot loose more than they have invested. (Private company)

Stocks- separates the corporation from its owners being personally liability for legal issues (being sued)

Franchise

A well established business that has a successful product or service that is willing to expand by “selling” individual stores to individuals or partnerships. Stores must following guidelines from parent

company Ensures all store are the same and consistent Individual stores must pay a percentage of

profits to parent company Individual stores must buy all supplies from

parent company

Franchise (con’t)

Examples Many restaurants- McDonalds, Subway,

Dunkin Donuts, Dominos, Gas Stations-