Chp 6.

1
WEEK 1 – LESSON 3
Chapter 6
Business Ownership and
Operations

Section 6.1
Types of Business
Ownership
Sole Proprietorships
MCQS: About three-quarters of all
businesses in the United States are sole sole proprietorship
proprietorships. a business owned by one
person
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Advantages of Sole Proprietorships

Proprietors are
Easy to start
in charge

Proprietors keep Taxes are lower

all the profits than a corporation’s
Sole Proprietorships
A major disadvantage of owning a sole
proprietorship is that the owner has unlimited liability
unlimited liability. when the owner is
responsible for the
company’s debts
Partnerships
To start a partnership, you need a
partnership agreement.
partnership
a business owned by two
or more people who share
its risks and rewards
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Disadvantages of Sole Proprietorships

Limited access Many run out

to credit of money

The owner may not have The business ends

the necessary skills when the owner dies
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Advantages of Partnerships

Easy to Easier to Easier to

start obtain capital obtain credit

Not dependent
Only taxed Diversity in
on a sole
once skills
person
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Disadvantages of Partnerships

If one partner
Unlimited legal
Business profit is makes a mistake,
and financial
shared all partners are
liability is shared
responsible