Notes- Chapter 35

Notes- Chapter 35 - Chapter 35- Sole Proprietorships and...

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Chapter 35- Sole Proprietorships and Franchises Entrepreneur- one who initiates and assumes the financial risk of a new enterprise Sole Proprietorships Sole Proprietorship - The owner is the business; more than 2/3 of all American businesses are S.P. - Advantages o Owner gets all of the profits o Easier and less costly to start because fewer legal formalities are required o More flexibility (can make decisions as he pleases) o Sole proprietor pays only personal income taxes o Allowed to establish tax-exempt retirement accounts - Disadvantages o Owner bears all burdens and liabilities (unlimited liability) Creditors can go after the owner’s personal assets o When the owner dies, the business is automatically dissolved o When raising capital, the owner has to get personal funds and personal loans. Franchises Franchise - arrangement in which the owner of a trademark or copyright licenses others to use it in selling of goods or services Franchisee- a purchaser of a franchise Franchisor-
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Notes- Chapter 35 - Chapter 35- Sole Proprietorships and...

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