Unit 1 notes - Unit 1 1.

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Unit 1 1. Legally, businesses can be organized as sole proprietorships, partnerships, or corporations. In your own words,  briefly describe each of these legal entities. Then, pick one and explain the advantages and disadvantages of  using this form of business organization.  Things to be aware of when doing business in other countries: 1. Legal 2. Political 3. Social 4. Cultural 5. Economic environments Intercontinental barriers include 1. Quotas – restrictions on the number of certain products imported 2. Embargoes – banning of exports and/or imports of a product or all products to a particular country 3. Tariff – Tax on imported products Difference between a free-market economy and a planned economy are a planned economy relies on a centralized government to control most factors of product and allocation decisions.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Examples are Communism and socialism. Free Market allows individual business to control, Mixed market consist of both. Forms of Business 1. Sole Proprietorship – owned and operated by 1 person a. Advantage i. freedom to be own boss ii. Easy to form iii. Low Start up b. Disadvantage i. Being personally liable for all debts ii. Difficult to borrow money for start up 2. General Partnership – 2 or more owners a. Advantage i. Growth potential ii. Easier to borrow money iii. Partners are taxed as individuals b. Disadvantages
Background image of page 2
i. Unlimited liability – each partner may be liable for all debts ii. Difficulty transferring ownership 3. Corporation – business that have property rights and separate status from its owners a. Advantage i. Limited liability feature, as owners are only liable for the amount they invest ii. Continuity, which means the business can continue after the owners b. Disadvantage i. High start-up cost ii. Amount of regulations iii. Double taxation Reference: Ebert, R. J., & Griffin, R. W. (2005). Business Essentials. Upper Saddle River, NJ: Pearson Prentice Hall Definitions: 1. Business – Organization that provides goods or services to earn profit 2. Profit – Difference between a business’s revenue and its expenses
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. External Environment – Everything outside an organizations boundaries that
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/02/2011 for the course BUSN 105 taught by Professor Markw.preising during the Fall '10 term at American InterContinental University.

Page1 / 9

Unit 1 notes - Unit 1 1.

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online