Lesson+02

Lesson 02 - Forms of Business Ownership


• Partnership – a business owned by two or more persons who share the risks and rewards • Stock – shares of ownership in a corporation • Intermediary – business that acts as a go-between in moving goods from producers to consumers, such as wholesalers, retailers, and distributors • Sole proprietorship-a business owned by only one person • Corporation-a business treated by law as separate from its owners • Processors-businesses that change raw goods into more finished products • Manufacturers-businesses that make finished products out of raw processed goods • Unlimited liability-full legal and financial responsibility for a business • Limited liability-financial responsibility of business owners only for what they invested in a business • Franchise-a contractual agreement to use the name and sell the goods or services of an existing company • Nonprofit organization-a business whose main purpose is to provide a service rather than to make a profit • Cooperative-an organization of businesses owned and operated by the members, who pool their resources and share the benefits • Producer-a business that gathers raw products in their natural state • Wholesaler-a type of business that buys goods in large amounts and resells them to other businesses in smaller lots • Retailer-a business that sells goods or services directly to the public
 * Important Terms for this Lesson:**

**Q:** How is the U.S. population changing? **A:** The U.S. population is becoming older. The number of Asian, Hispanic, and African-American workers will grow. The number of contingent workers will grow. **Q:** What are six business activities completed by all businesses? **A:** Six business activities include generating ideas, raising capital, employing and training personnel, buying goods and services, marketing goods and services, and maintaining business records **Q:** What is one advantage of investing in a corporation? **A:** One advantage is limited liability. **Q:** What is the size of the workforce for the greatest number of businesses in the U.S? **A:** The greatest number of businesses in the U.S. employ less than 20 people. **Q:** Which form of business ownership is the most complex and difficult to form? **A:** The most complex form of business ownership is the corporation. **Q:** What are disadvantages of the partnership form of business? **A:** Disadvantages include unlimited liability, uncertain life, and disputes among the partners.
 * Lesson Summary:**