6-Types of Business Ownership

Objectives:

• Describe the advantages and disadvantages of three major forms of business organizations.

• Describe how cooperatives ad nonprofits are like and unlike corporations and franchises.

3 Main types

• Sole-72% of all businesses• Partnership—5% of all businesses• Corporation—20% of all businesses

– 3% are other types of ownership

Revenue Generated by Businesses

Sole Propriertorship5%

Corporation85%

Partnership8%

Other2%

Revenue by Type

Sole

• Advantages

Sole

• Disadv.

Partnership

• Adv.

Partnership

• Disadv.

Corporation

• Registered by a state and legal entity (separate from owners)

• Adv.

Corporation

• Disadv.

Other Ways to Organize

• Cooperative• Nonprofit• franchise

This section objectives:

• Differentiate between the six types of businesses.

• Describe the five functions of business• Discuss how the five functions of business

relate to each other

Types of Businesses

• Producer• Processor• Manufacturer• Intermediary—wholesale & retail• Retail & service businesses

Functions of Business

• Production and procurement• Marketing• Management• Finance• Accounting

Production & procurement

• Production—process of creating, expanding, manufacturing, or improving goods and services.

• Procurement—buying and reselling goods that have already been produced.

Marketing

• Process of planning, pricing, promoting, selling, and distributing ideas, goods, and services

Management

• Process of achieving company goals by planning, organizing, leading, controlling and evaluating the effective use of resources

Finance and Accounting

• Finance-business or art of money management

• Accounting—maintaining and checking records, handling bills, and preparing financial statements of business

Interdependent

• Five functions are interdependent

End