Forms & Types of Business Flashcards
- This is a business with a single natural
owner who manages the business on
his own or employs employees. - This is the simplest and the most
common way to set up a business.
SOLE PROPRIETORSHIP
- This is a legal form of business with
two or more individuals who combine
their resources and manages the
business. - Partners divide the unlimited
liabilities of the business and
control the business together.
PARTNERSHIP
3 KINDS OF PARTNERSHIP
- General Partnership
- Limited Partnership
- Limited Liability Partnership
All owners share in operating the firm and in assuming liability for the debts of the business.
A (_) partner is an owner who has unlimited liability
and active in managing the business.
General Partnership
Has one or more general partners and one or more () partners who have () liability to the extent of their investment.
(_) partner is an owner who makes investments in the business but does not actively participate in its management and his liability for losses does not
extend to his contribution in the business.
Limited Partnership
Has all of the partners haver (_)
of the business debts and has no general
partnership.
Limited Liability Partnership
- This is a legal entity doing business owned by multiple shareholders and is overseen by a board of directors elected by the shareholders.
- It is separated in terms of personality from its owners and can borrow money, enter into contracts,
pay taxes and be sued. - No shareholder of a () is personally liable for the debts, obligations or acts if a ().
CORPORATION
A cooperative is an autonomous
association of persons, organized and
controlled by its members, who
voluntarily pool resources to provide
themselves and their patrons with
goods, services, or other benefits
- It provides:
1. democratic control based on 1
member = 1 vote
2. open and voluntary membership
3. patronage dividends
COOPERATIVES
- are firms that generally use their employees to provide intangible products or (_) to customers. These services include professional skills, advice,
expertise, and other related products. (e.g. accounting firms, law firms, and dry cleaning establishments, etc. )
SERVICE BUSINESS
- are firms that sell tangible products. This type of businessbuys finished or almost finished goods from their suppliers and resell the same to customers. primarily earn revenues from the sale of the goods of (_), also known as sales revenue or sales.
MERCHANDISING BUSINESS
2 TYPES OF MERCHANDISING COMPANIES
- RETAILER
- WHOLESALER
- is a merchandising company that sells goods directly to customers.
RETAILER
- is a merchandising company that sells goods to retailers.
WHOLESALER
- () companies or simply (), buy materials, convert them into products, and then sell the products to other companies or to the final consumers.
MANUFACTURING BUSINESS
