Business Notes Chapter 2.docx - Chapter 2 Forms of Business Ownership Forms of business ownership and types of business describe how they are organized

Business Notes Chapter 2.docx - Chapter 2 Forms of Business...

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Chapter 2 Forms of Business Ownership Forms of business ownership and types of business describe how they are organized and run. The four main forms of business ownership are sole proprietorship, corporation, co-operative, partnership, and franchise (considered a hybrid of the four forms of ownership). Sole Proprietorship A sole proprietorship is a business owned by one person who is known as a proprietorship. Funds to the business usually come from the owner’s savings, friends, and family or from a bank loan. If the business prospers, the owner receives all the profits. If the business does poorly, the owner is responsible for its loses. This is called unlimited liability. Corporation A corporation is a business granted legal status with rights, privileges, and liabilities that are distinct from those who work for the business. Small portions of corporate ownership that are owned public stocks or shares. Individuals who own shares of a corporation are called shareholders and become owners of the business. Shareholders have limited liability. A board of directors runs a corporation that is owned by shareholders. Co-operative A co-operative is owned by the workers or members who buy the product or use the service that the business offers. This type of business is motivated by service and not
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  • Fall '17
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  • Business, Corporation, International Business Structures

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