Sole Proprietorship -Economics Notes
What is the most common form of business organization?
______
Define this form of business organization:
______
What percentage of businesses in the United States are sole proprietorships?
______
Why do they account for only 6% of all United States sales?
______
List two advantages of the sole proprietorship:
1-______
2-______
List two disadvantages of the sole proprietorship:
1-______
2-______
Define liability:
______
Why is unlimited personal liability a disadvantage of owning a sole proprietorship?
______
What are fringe benefits?
______
Why do fringe benefits help employers attract good workers?
______
Can you define the following terms?
Business license:
______
Zoning laws:
______
List three trade-offs of running a sole proprietorship:
1-______
2-______
3-______
What kind of person is most suited to own a sole proprietorship?
______
If you were to open a business of your own, what kind of business would it be?
______
How would you get the money to start such a business?
______
Partnerships – Economics Notes
1)Let’s review:
What is a sole proprietorship?
______
What is liability?
______
What kind of liability do sole proprietors have?
______
2)A ______is a business organization owned by two or more persons. The partners must agree on how profits and responsibilities are divided.
The most common type of partnership is a ______.
In such a partnership, partners ______equally both responsibility and liability.
Another type of partnership is a ______.
In this type of partnership, only ______partner is required to be a general partner. That partner has ______over the business, but unlimited personal liability for the firm’s actions.
Remember, trade-offs!
The other partner only contributes ______.
Why would someone be interested in being the limited partner?
______
Finally, a newer type of partnership is the ______or (______). In this type of partnership all partners are ______and are shielded from ______in certain situations.
Can you think of a partnership that would require protection from the mistakes of the other partners? Let’s make a list of such partnerships.
______
3)List three advantages of partnerships:
A-______
B-______
C-______
4)What are assets?
______
5)List three disadvantages of partnerships?
A- ______
B- ______
C- ______
6)What are the trade-offs involved in forming partnerships?
______
7)Which kind of partnership offers none of the partners protection from unlimited liability?
______
8)How does a limited partnership differ from a limited liability partnership?
______
Corporations, Mergers, and Multinationals - Economics
1)Let’s review:
How does a sole proprietorship differ from a partnership?
______
What are the three types of partnerships?
______
How do these partnerships differ?
______
2)Most large businesses in the United States are ______.
A ______is a legal entity, or being, owned by individual
______.
When a person buys stock, he becomes a partial ______of a corporation.
Each stockholder has limited ______for the firm’s debts.
A stockholder can only lose as much ______as he has invested.
How is that different from a sole proprietor’s liability?
______
A corporation is like a person. It pays ______, can enter into ______, and can bring ______in court.
All corporations have the same basic structure. ______elect a board of directors. The board makes the ______for the corporation.
The most important advantage of the corporate structure is
______. Stockholders can only lose the money they have invested. They also make ______or profits.
Corporations can raise money by selling ______.
Corporations can borrow money by selling ______.
When an investor buys a bond, he is ______money to the corporation and will be repaid with ______.
Remember, this little poem:
A stockholder ______
While a bondholder ______
3)Sometimes two or more companies combine. This is called a
______.
A ______merger is when two or more firms in the same market join together.
The government carefully monitors such mergers.
Why?
______
A ______merger is when two or more firms involved in ______stages of making the same good or service combine.
Give an example of such a merger.
______
4)Multinational corporations are corporations that operate in more than ______at a time.
Give examples of multinational corporations.
______
5)Do you have unlimited personal liability when you purchase a bond?
Explain your answer.
______