Business Types Assignment
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Business Types Assignment
Before organizing a business, an organizational structure must be chosen. There are five basic business structures to choose from--a sole proprietorship, a partnership, a corporation, a limited liability company (LLC), or a franchise. It is important to understand the differences, advantages, and disadvantages of each of these organizational structures as a business formed so that it is organized in the most advantageous way for the business owners.
BUSINESS ORGANIZATIONAL STRUCTURES
Sole ProprietorshipAdvantages (Benefits) / Disadvantages (Costs)
Why would somebody want to organize a business as a sole proprietorship?
Why do sole proprietors have to put in long hours?
A sole proprietor has unlimited liability for all business debts--what does that mean?
Partnership
Advantages (Benefits) / Disadvantages (Costs)
Why would somebody want to organize a business as a partnership?
What are the differences between general and limited partnerships?
Why is it important to have an Articles of Partnership document?
Corporation
Advantages (Benefits) / Disadvantages (Costs)
Why would somebody want to organize a business as a corporation?
What happens when a corporation issues stock?
How are corporations double taxed?
Limited Liability Company (LLC)
Advantages (Benefits) / Disadvantages (Costs)
Why would somebody want to organize a business as a limited liability company?
What is the primary advantage of organizing a business as an LLC?
How is ownership in an LLC expressed?
Franchise
Advantages (Benefits) / Disadvantages (Costs)
Why would somebody want to organize a business as a franchise? -
Why is it important for a franchise to have a specific “territory?”
List some examples of franchises.
What Structure Should We Choose?
As you read through the four scenarios found in the Structure Scenariospresentation with your assigned group, discuss which organizational structure would be best suited for each business. Please be sure to answer the questions found in the tables below.
Scenario #1Which business organization would you choose?
What are the advantages of this choice?
What are the disadvantages of this choice?
Scenario #2
Which business organization would you choose?
What are the advantages of this choice?
What are the disadvantages of this choice?
Scenario #3
Which business organization would you choose?
What are the advantages of this choice?
What are the disadvantages of this choice?
Scenario #4
Which business organization would you choose?
What are the advantages of this choice?
What are the disadvantages of this choice?