Activator – Chapter 8Write down three occupations that you’re considering for your future. Categorize each of your choices based on who your employer might be for each job.

Job Employer1.2.3.

Chapter 8 - Business Organizations

Business organization (firm) –establishment formed to carry on a commercial enterprise.3 types - Sole proprietorship, partnership,

corporationEach has different levels of liability (responsibility)

Liability – legal obligation to pay debts incurred by the business

Sole proprietorship – a business owned and managed by a single individualMost common type of business organization75% of all businesses are sole proprietorships in the U.S.

Sole Proprietor

http://www.arete-basketball.com/

Partnership Partnership – a business organization owned by two or more persons who agree on a specific

division of responsibilities and profits Account for about 5 % of all businesses

General Partnership – partners share equal liability and responsibility Doctor’s lawyers, accountants, small family businesses

Limited Liability Partnership – all partners are limited from personal liability, in the case of another partners mistakes. Legal buffer from personal liability

Articles of Partnership – outline the agreements between partners.

CorporationCorporation – is a separate legal entity, or legal being, owned by individual

stockholders, each of whom faces no liability for the firm’s debtStock – a certificate of ownership in a corporation

Partial owner , i.e. 1000 shares, purchase 1, 1/1000th owner of the company

Corporation has a separate legal identity, an entity separate from its owners

Account for 20% of all businesses, but 90% of all products sold

CorporationClosely held – privately held corporations, that do not

trade stock on the public exchangePublicly held – sells stock on the market to investors in

order to grow the business

MergersMerger – combine with another company to become one entityHorizontal merger – firms in the same market with a similar good

or service mergeVertical merger –firms involved in producing different goods or

services mergeConglomerates – business mergers with more three or more

businessesMultinationals – large corporation that produces and sells its

goods and services throughout the world

Other Organizations Business Franchise – semi-independent business that pays fees and

royalties to a parent company Business is granted right to sell using the name, product and brand

of the company Zaxbys, McDonalds, Subway, etc.

Cooperative – Co-0ps, business organization owned and operated by a group of individuals for their shared benefit

Other OrganizationsConsumer cooperative –consumers sell

merchandise to members at reduced pricesBook clubs, health food stores

Service cooperative—provide a service rather than a goodCredit union, banking services, health care, legal

helpProducer cooperative—agricultural marketing

that help members sell their products

Other Organizations Nonprofit Organizations – business that gears towards benefiting society (philanthropy) Professional Organizations—work to improve the image, working, conditions, and skill of

workers National Education Association, American Veterinary Medical Association, American Bar Associations

of Lawyers, etc. Business Organization—promote the collective business interests of a city, state, nation, or a

group of similar businesses Better Business Bureau

Other OrganizationsTrade Associations—nonprofits that promote

the interests of particular industriesLabor Unions – organized group of

workers whose aim is to improve working conditions, hours, wages and fringe benefits for its members.

Study Guide Chapter 7 + 81. Perfect/Pure competition2. Many buyers and sellers, identical products, buyers + sellers are well

informed, no barrier to entry.3. Barrier to entry4. Monopoly5. Natural6. Prices are not competitive, dictated by monopolist.7. Patent 8. Government

9. Price discrimination10. Market power11. Monopolistic 12. Many firms, product differentiation, low barrier to entry, little control

over price13. Running shoes, pens, cars, etc., gas station near highway, publix,

designer t-shirt

Study Guide Chapter 7 + 814. Oligopoly 15. Collusion, price fixing16. Antitrust17. Microsoft18. Sole proprietor19. Partnership20. Corporation21. Sole proprietorship22. Corporation

23. Partnership 24. Sole proprietorship25. Partnership 26. Corporation 27. Horizontal28. Vertical29. Conglomerate 30. Franchise