one individual owns and operates the business. Common in retail stores, service business and agriculture.

Advantages: no organizational fees. Sole decision making power. Only taxed as personal income.

Disadvantages: unlimited personal liability. contracts and businesses are subject to termination at death of owner.

Pooling of capital resources and professional talent of 2 or more individuals (often law firms, medical assoc., engineering)

Advantages: pool resources and no formal organizational structure

Disadvantages: unlimited personal liability. Uncertainty of duration of business b/c partnership dissolves at death of partner.

Artificial being created by government grants. (treated as non-natural person)

Advantages: attractive to investors due to limited liability of shareholders. Only risk is limited amount of capital investment in business. 

Disadvantages: double taxation (corporate and personal)

Relationship in which two or more persons combine their labor or property for a single undertaking and share profits and losses equally. Similar to a partnership except for a pursuit of a single transaction. All those in venture are accountable for negligence. 

(had start and end date)

a method of doing business. NOT a form of organization.

Franchisor grants the franchisee the right to engage in particular activity - using franchise owned intellectual property

Franchise owned intellectual property

LIST

Patents - inventions or process

Copyrights - intellectual expression

Trademarks - mark that identifies a product. 

Trade secret - formula, device, or compilation of info. Used in business that provides advantages over competitors who do not have same information.

Types of Franchise

LIST

1. Manufacturing or processing franchise

2. Service franchise

3. Distribution Franchise

Includes: business experience of franchise - franchisor has to notify the franchisee of any thing from the past within 10 days of purchase. 

ex: bankruptcy, actual/average sales, grounds for termination