BL-Chapt35 - Print Chapter Page 1 of 15 Sole...

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Sole Proprietorships and Franchises Chapter Introduction 35-1 Sole Proprietorships 35-1a Advantages of the Sole Proprietorship 35-1b Disadvantages of the Sole Proprietorship 35-2 Franchises 35-2a Types of Franchises 35-2b Laws Governing Franchising 35-2c The Franchise Contract 35-3 Franchise Termination 35-3a Wrongful Termination 35-3b The Importance of Good Faith and Fair Dealing Chapter Recap Page 1 of 15 Print Chapter 2010-8-30 ..
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Chapter Introduction Anyone who starts a business must first decide which form of business organization will be most appropriate for the new endeavor. In making this decision, the entrepreneur (one who initiates and assumes the financial risk of a new enterprise) needs to consider a number of factors, especially (1) ease of creation, (2) the liability of the owners, (3) tax considerations, and (4) the need for capital. In studying this unit, keep these factors in mind as you read about the various business organizational forms available to entrepreneurs. You may also find it helpful to refer to Exhibit 40–4 in Chapter 40, which compares the major business forms in use today with respect to these and other factors. Traditionally, entrepreneurs have relied on three major business forms–the sole proprietorship, the partnership, and the corporation. In this chapter, we examine the sole proprietorship and the franchise, which, though not really a separate business organizational form, is widely used today by entrepreneurs. In Chapter 36, we will examine the second major traditional business form, the partnership, as well as some newer variations on partnerships. The third major traditional form–the corporation–will be discussed in detail in Chapters 38 through 41. We will also look at the limited liability company (LLC), a relatively new and increasingly popular form of business enterprise, and other special forms of business in Chapter 37. We conclude this unit with a chapter (Chapter 42) discussing practical legal information that all businesspersons should know, particularly those operating small businesses. Page 2 of 15 Print Chapter 2010-8-30 ..
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35-1 35-1a 35-1b Sole Proprietorships Advantages of the Sole Proprietorship Disadvantages of the Sole Proprietorship Case 35.1: Garden City Boxing Club, Inc. v. Dominguez United States District Court, Northern District of Illinois, Eastern Division, 2006. __ F.Supp.2d __. The simplest form of business is a sole proprietorship . In this form, the owner is the business; thus, anyone who does business without creating a separate business organization has a sole proprietorship. More than two-thirds of all American businesses are sole proprietorships. They are usually small enterprises–about 99 percent of the sole proprietorships in the United States have revenues of less than $1 million per year. Sole proprietors can own and manage any type of business from an informal, home-office undertaking to a large
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BL-Chapt35 - Print Chapter Page 1 of 15 Sole...

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