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Chapter 35 - Forms of Business OrganizationChapter 35 - Forms of Business OrganizationCHAPTER OVERVIEWEach type of business organization has advantages and disadvantages. For instance, in a soleproprietorship, the owner has control. However, with control comes responsibility. Determiningwhich form of business organization is best is a difficult yet important decision. As students readthe chapter, they should step into the shoes of each person or group making the decision. LEARNING OBJECTIVESAfter reading this chapter, students will be able to answer the following questions: 1.What are the major forms of business organizations?2.What are the differences among the different forms of business organizations?3.What are the specialized forms of business organizations?LECTURE NOTES WITH DEFINITIONS What are the major forms of business organizations?A corporation is owned by shareholders, and is a separate legal entity.A limited liability company (LLC) has limited liability like a corporation, but is taxed like a partnership.What are the differences among the different forms of business organizations?Teaching tip: Review Exhibit 35-4.Exhibit 35-4 compares the sole proprietorship, general partnership,limited partnership, and corporation in terms of:oLegal positionoControl considerationsoLiabilityoLifetimeoTaxationoTransferability of ownershipWhat are the specialized forms of business organizations?
Chapter 35 - Forms of Business Organizationfinancing, producing goods, selling goods, securities, and commodities.MMK Group, LLC v. The Sheshells Company, LLC, et al considers the formalities involved in a joint venture.A franchise provides a strong trade name or trademark of a franchisor will bring customers to the franchisee.Mary Kay, Inc. v. Janet Isbell (briefed below) considers whether a franchise agreement exists between the parties.A franchise agreement outlines the details regarding payment, location, business practices and agreements, prices, and how and when the franchise relationship can be terminated.