Chapter 5

Chapter 5 - Chapter 5 Options for Organizing Business Objectives 1 Define and examine the advantages and disadvantages of the sole proprietorship

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Chapter 5 Options for Organizing Business Objectives a. Define and examine the advantages and disadvantages of the sole proprietorship form of organization. b. Identify two types of partnership and evaluate the advantages and disadvantages of the partnership form of organization. c. Describe the corporate form of organization and cite the advantages and disadvantages of corporations. d. Define and debate the advantages and disadvantages of mergers, acquisitions, and leveraged buyouts. e. Propose an appropriate organizational form for a startup business. The Three Primary Forms of Business Organizations o Sole proprietorships o Partnerships o Corporations Comparison of Sole Proprietorships, Partnerships, and Corporations Sole Proprietorships o A sole proprietorship is a business owned and operated by one individual 0. Common examples include Many restaurants Barber shops Flower shops Dog kennels Independent grocery stores Advantages of the Sole Proprietorship o Advantages 1. Ease and cost of formation 2. Secrecy 3. Distribution and use of profits 4. Control of the business 5. Government regulation 6. Easy to close the business Disadvantages of the Sole Proprietorship o Disadvantages 7. Unlimited liability 8. Limited sources of funds 9. Limited skills 10. Lack of continuity 1
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11. Lack of qualified employees Partnerships o A partnership is an association of two or more persons who carry on as co-
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This note was uploaded on 04/21/2008 for the course BUSA 106 taught by Professor Staff during the Spring '08 term at Winona.

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Chapter 5 - Chapter 5 Options for Organizing Business Objectives 1 Define and examine the advantages and disadvantages of the sole proprietorship

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