Types and Forms of Business Flashcards
what is the definition of a business?
an organization that produces or sells goods or services to satisfy the needs, wants, and demands of customers for the purpose of making a profit
what are the forms of businesses?
sole proprietorship, corporation, and partnerships
what is a sole proprietorship?
a business owned by one person
what are advantages of a sole proprietorship business?
you get all the money, easier to make decisions/no conflicts, and its easy to start
what are disadvantages of a sole proprietorship business?
unlimited liability, easy to fail, and heavy workload
what is a corporation?
a legal entity created by shareholders with the purpose of making a profit
what are the advantages of a corporation?
limited liability, tax benefits, and can continue to exist indefinitely
what are disadvantages of a corporation?
hard to start, possible conflict with shareholders, and the expenses
what is a partnership?
a company owned by 2 or more people
what are advantages of a partnership business?
easy to start, can split costs/less of a financial burden, and less paperwork
what are disadvantages of a partnership business?
splitting the money you earn, possible conflicts, and unlimited liability
what are the types of businesses?
non profit business, merchandising business, manufacturing business, and a service business
what is a non profit business?
a company organized for purposes other than for generating profits
what is a merchandising business?
companies that buy products and then resell them at higher prices
what is a manufacturing business?
the production of goods using labour, equipment, and tools
