Major Forms of Business Ownership

Question	Answer
What is a business firm?	An organization that uses resourses to prduce goods and services which are sold to consumers, firms, and the government.
What are the most productive businesses?	Corporations
In a sole proprietorship,who is responsible for all debts, gets all profits, and makes all decisions?	The one owner.
Which business form has the longest long life span?	Corporation
What are 3 disadvantages of the sole proprietorship?	Unlimited liability, limited growth potential, and limited life.
What is a cooperative?	A business that provides services to its members and is not run for profit.
What is a partnership?	It is a business form that is owned by 2 or more persons who shre any profits that business earns, and are legally responsible for any debts.
What is the difference between a general and a limited partnership?	General partnership--all partnerships share equal responsibility for management and debts; Limited partnership--limited partners do not manage the business and have limited liability.
What are the disadvantages of a partnership?	1. Risky;trust issues; 2. unlimited liability; 3. lack of longevity
What are the two types of partnerships?	General and limited
What are some of the advantages of a partnerships?	1. Shared business capital; 2. shared decision making; 3. easy to form; 4. requires little capital to start
What are some of the advantages of the sole proprietorship?	1.requires little capital; 2. easy to form; 3. receives all profit; 4. personal satisfaction
What is the most common form in the US?	Sole proprietorship
Who have no liability in a corporation?	Stockholders
Which business can sell stocks and bonds?	Corporation
What are the advantages of a franchise?	1. national advertising; 2.well-known; 3. financial assistance; 4. proven record of success
What are the disadvantages of a franchise?	1. No room for innovation or creativity; 2. Must follow guidelines in contract
What is a franchise?	Contract by which a firm lets a person or group of people use its goods and sell its good or services.
Name some franchises.	McDonald's, Burger King, Wendy's, Domino's, KFC, Olive Garden, Dunkin' Donuts, Red Lobster
Name the 3 major types of cooperatives.	Consumer Cooperative, Service, Producer Cooperative
What do all cooperatives have in common?	They are not in business to make money.
Name a consumer cooperative.	Sam's Club, BJ's Cosco
Name a service cooperative.	Any credit union, DE Electric Cooperative
Namea producer cooperative.	A farmers' marketing cooperative
What is a corporation?	A business organization owned by stockholders and treated by law as an individual legal entity.
What are the advantages of a corporation?	1.Limited liability; 2. Easy to raise capital,profit, and losses. 3.Longevity
What are the disadvantages of a corporation?	1.Lack of personal satisfaction for stockholders; 2. Slow decision-making process; 3.Profits are taxed twice; 4. complex to set up

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