Transcript Introduction to Business - Halton District School Board

Chapter 2 – Forms of Business Ownership
FRANCHISE
- One business licenses
another to use its name,
operating procedures and
so on
CO-OPERATIVE
- owned by its workers
or by members who buy
from the business
- As a hybrid, can have any
form of ownership
SOLE
PROPRIETORSHIP
- Owned by one person
FORMS OF
BUSINESS
OWNERSHIP
CORPORATION
- Business is an artificial
“person” created by law
and is owned by
shareholders
PARTNERSHIP
- Usually owned by
two or more
partners

With a partner speculate about the advantages,
disadvantages of each form of business ownership

What types of decisions must business people make
before opening a business?
DEFINITION
A sole proprietorship is a business owned by one person.
• The owner has unlimited liability – if the business does
poorly the owner is responsible for all the losses.
ADVANTAGES
 be your own boss
 easy to start and end
 profits go to the owner
DISADVANTAGES
 unlimited liability
 financing may be difficult
 owner may not be familiar
with all aspects of business
Example: bicycle store owner, hot dog stand owner
DEFINITION
 A business with two or more partners who share the
responsibilities and profits/losses.
 Types of Partnerships:
1. General – most common – partners have unlimited liability
2. Limited – partners have limited liability
ADVANTAGES
 More capital and financing
 Shared responsibilities
DISADVANTAGES
 Unlimited liability in general
partnerships
 Partner disagreements
Examples: Some lawyers (e.g. divorce, civil,
real estate) will form partnerships to serve a
wider client base

John D. Rockefeller once said.
It Is Better To Have A Friendship Based On A
Business Partnership Than A Partnership
Based On A Friendship

What do you think? Explain the position you take.
DEFINITION
 A type of business owned by, but existing separately from, its
shareholders.
 4 Types of Corporations:
1) Private
3) Public
2) Crown
4) Municipal
ADVANTAGES
DISADVANTAGES
 Limited liability
 Timely and costly start-up
 Transfer of ownership is simple  People who own only a few
shares do not have much
influence on how the company
is run
Examples: IBM, DELL, HP, APPLE, Microsoft

Can be as small as one person or as large as a
multinational

The ownership of large corporations is divided into
many small parts, called shares or stock
◦ An individual who owns shares is called a shareholder

Some corporations sell (trade) their stock on public
exchanges such as TSX, Nasdaq.

Stock Market Rap
DEFINITION
 A business owned by the people, or members, who buy the
products or use the services that the business offers.
 In Canada many co-operatives in the health care and child care
sectors are not-for-profit
ADVANTAGES
DISADVANTAGES
 Less expensive goods/services
 Easily set up
 Decision-making process could
be difficult
Examples: IGA (Independent Grocers Alliance), bank unions,
The Co-operative Housing Federation of Canada
DEFINITION
 In a franchise operation, one business, the FRANCHISER,
licenses the rights to its business to another , the FRANCHISEE.
ADVANTAGES
DISADVANTAGES
 Brand recognition
 Expensive to purchase
 Less expensive cost of
 Monthly & advertising fees
products
 Little/no control over menu
 Uniform quality of products
and prices
 Support from franchisor (ready
made business)
Service
Retail
Manufacturing
Non Profit







What is E-Commerce?
What is a Joint Venture?
What is an International Franchise?
What is a Strategic Alliance?
What is a Merger?
What is Offshoring?
What is a Multinational Corporation?