This document discusses different types of business organizations including sole proprietorships, partnerships, and corporations. It notes the pros and cons of each structure and provides examples. It specifically discusses double taxation that can occur with corporations and the liability risks of sole proprietorships and partnerships if they are sued. The document also mentions forming articles of incorporation and the differences between common and preferred stock.

1. 1.
Describe a time when you were injured at a
business, or might have been injured.

2. Why are Entrepreneurs important?
2 reasons

3. Say you want to become…

4. Risk vs. Reward

How likely is my business to cause harm?
Liability
 Responsibility for risks


5. Sole Proprietorship







Single person
2 positives, 2 negatives
Good for: low liability, low entry costs
Benefits: single person has all control and keeps
all profits
Drawbacks: single person assumes all risk,
hard to raise capital
Examples: small construction firms,
artistic firms, bloggers, import/export

6. Partnerships

Two or more people in business together
2
positives, 2 negatives
Good for: low liability
 Benefits: low entry costs, shared costs
 Drawbacks: partners assume all risk
 hard to raise capital,
 agreements “like a marriage”


Examples: law firms, small specialized firms

7. Subway page 218

8. Liability
If your Sole Proprietorship or
Partnership is sued…
 They can take:

 Your house
 Your car
 Your money in the bank
 Your future money!!!

9. What happens
if?

New
Restaurant!!!

11. Corporation
A legal “person”
 Good for: higher liability
 Benefits: owners protected
 easier to raise capital
 Drawbacks: double taxation
 increased regulation


Examples: restaurants, LLC’s,
Sports Franchises

12. Double taxation
Corporation pays its own taxes: 25-35%
 Corporation pays employees wages/salary
 Employees ALSO pay taxes: 20-38%


Trade off is less liability more tax

13. 2 types of Corporations

Privately held – owned by founders or
owners

Publicly held – owned by shareholders

14. Corporations
Partnerships
Sole Proprietorships
#2 OPTIC graph on page 220

15. On a full sheet
Bellringer
1. OPTIC for this graph
Source: Forbes Magazine 2011

16. Which of the 3 business orgs
would you use to start a…..

17. Which of the 3 business orgs
would you use to start a…..

18. Which of the 3 business orgs
would you use to start a…..

19. Which of the 3 business orgs
would you use to start a…..

20. Which of the 3 business orgs
would you use to start a…..
Tile setting

21. Which of the 3 business orgs
would you use to start a…..

22. Which of the 3 business orgs
would you use to start a…..

23. Which of the 3 business orgs
would you use to start a…..

24. Which of the 3 business orgs
would you use to start a…..

25. Business Org Closure Pages 220-223
2. How hard would it be to file articles of incorporation
in the state of Arizona?
3. What is the difference between common and
preferred stock?
4. Explain how double taxation works.
5. What would you have to do if you wanted to open a
Subway franchise?
6. Compare and contrast the advantages of owning a
franchise like a Subway. 3 for each
7. Which business organization should you use to
open a restaurant? & why?
8. Which business organization should you use to
open a computer tech company? & why?
QE. Find an entrepreneur in the book who you could admire and
explain what you could learn from them. (list on page “x”)