CP Economics (Chapter 8, #1) GPS SSEMI4a Name ______

Date ______Period______

Sole Proprietorships & Partnerships:

Warm Up #21- OPEN your own BUSINESS!

I. Types of Business Organizations

A. KEY CONCEPT

1. Most of the ______in a market economy are______organizations, commercial or industrial ______and the people who work in them. The purpose of most business organizations is to earn a ______.

B. WHY THE CONCEPT MATTERS

1. Businesses vary in size and are ______differently. The American free enterprise system allows ______to choose the kind of ______organization that best suits their purpose.

II. Sole Proprietorships:

A. A business owned and controlled by one ______.

B. The ______, ______and ______common type of business organization.

1. Robert Johnson- BET Founded 1980. ______

2. Mary Kay Ash- ______Founded 1963.

III. Advantages of a sole proprietorship:

A. Easy to ______

1. Zoning Laws

B. Full control of the ______by the owner

C. Exclusive rights to ______by the owner

IV. Disadvantages to a sole proprietorship:

A. ______liability by the owner

B. Sole responsibility of the owner to operate the ______

C. Limited growth ______for the business, due to limited financial ______.

1. ______- anything of value that a borrower agrees to give up if they are not able to repay the loan.

D. Lack of ______of the firm.

V. Partnerships

A. A ______co-owned by two or more people, or “______”, who agree on how responsibilities, profits, and losses will be ______.

B. Bill Gates and Paul Allen- ______Seattle, Washington. Founded 1975.

C. Larry Page and Sergey Brin- ______Founded 1996

D. Mark Zuckerberg, Chris Hughes, Eduardo Saverin, Sean Parker, Andrew McCollum, Dustin Moskovitz- ______Founded 2004

VI. Three Types of Partnerships

A. Type 1: General partnerships:

1. ______have ______decision-making authority.

2. Each partner has ______.

B. Type 2: Limited partnerships:

1. Parnters join as ______.

2. Partners have an ______in decision making

3. Partners have ______.

C. Type 3: Limited Liability Partnerships

1. ______(LLP)—all partners are limited

i. not responsible for ______of other partners

ii. not all businesses can register as LLP’s

a. only those in which ______can be an issue

VII. Advantages of a partnership:

A. East to ______

B. Allow ______

C. Lets partners ______decision making

D. Shares business ______between partners

VIII. Disadvantages of a partnership:

A. ______by partners

B. Potential for ______among partners

C. Lack of business ______

Closing Activity #20
Explain whether the trait is present in each of the
business organizations below and, if so, how.
Sole
Proprietorship / General Partnership / Limited
Partnership / Limited
Liability
Partnership (LLP)
Owner operates business
Limited life
Unlimited liability
Limited funds
Ease of start-up & closure