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    PF Chapter 8-1

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    Anchit Jassal
    A sole proprietorship is a business owned by one person and makes up about 75% of all US businesses. It has advantages like total control, profits going to the owner, and few regulations, but disadvantages include unlimited liability, limited resources, and reliance on the owner's lifespan. A partnership is a business owned by two or more people, making up about 5% of US businesses. It has a partnership agreement that outlines contributions and responsibilities. General partners actively manage the business with unlimited liability, while limited partners provide funds without management duties. Partnerships have advantages like more skills, capital and control, but also unlimited liability and potential partner disagreements.

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    PF Chapter 8-1

    Uploaded by

    Anchit Jassal
    39 views10 pages
    A sole proprietorship is a business owned by one person and makes up about 75% of all US businesses. It has advantages like total control, profits going to the owner, and few regulations, but disadvantages include unlimited liability, limited resources, and reliance on the owner's lifespan. A partnership is a business owned by two or more people, making up about 5% of US businesses. It has a partnership agreement that outlines contributions and responsibilities. General partners actively manage the business with unlimited liability, while limited partners provide funds without management duties. Partnerships have advantages like more skills, capital and control, but also unlimited liability and potential partner disagreements.

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    PF chapter 8-1

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    A sole proprietorship is a business owned by one person and makes up about 75% of all US businesses. It has advantages like total control, profits going to the owner, and few regulations, but disadvantages include unlimited liability, limited resources, and reliance on the owner's lifespan. A partnership is a business owned by two or more people, making up about 5% of US businesses. It has a partnership agreement that outlines contributions and responsibilities. General partners actively manage the business with unlimited liability, while limited partners provide funds without management duties. Partnerships have advantages like more skills, capital and control, but also unlimited liability and potential partner disagreements.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    39 views10 pages

    PF Chapter 8-1

    Uploaded by

    Anchit Jassal
    A sole proprietorship is a business owned by one person and makes up about 75% of all US businesses. It has advantages like total control, profits going to the owner, and few regulations, but disadvantages include unlimited liability, limited resources, and reliance on the owner's lifespan. A partnership is a business owned by two or more people, making up about 5% of US businesses. It has a partnership agreement that outlines contributions and responsibilities. General partners actively manage the business with unlimited liability, while limited partners provide funds without management duties. Partnerships have advantages like more skills, capital and control, but also unlimited liability and potential partner disagreements.

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    Sole Proprietorship and

    Partnership
    Section 8-1
    Sole Proprietorship
     A sole proprietorship is a business
    owned by one person.
     Oldest and most common form of
    business ownership.
     About 75% of all business in the
    United States are sole
    proprietorships.
     A person who starts a business is
    known as an entrepreneur.
    Advantages of Sole Proprietorship
     You can make all the decisions!
     Easy set-up (minimal paperwork)
     Licensing (obtain from state or local government)
     Business name (need to get a certificate)
     Employees (need to get Employer Identification #, EIN)
     Total Control
     Profits to Owner
     Profits Taxed Once
     Few Government Regulations
    Disadvantages of Sole Proprietorship
     Limited capital (any $$ needed comes from your pocket)
     Unlimited liability (owner is responsible to pay the business debts out
    of personal assets)
     Limited human resources (don’t have other managers to ask
    opinions from)
     Limited life (business’s life span or existence is determined by the
    owner’s life span or decision)
    The Partnership

     A partnership is a business
    owned by 2 or more
    persons.
     About 5 % of all businesses
    in the US are partnerships.
    Partnership Agreement
     The partnership agreement is a written document that
    states how the business will be organized.
     It includes:
     Names of partners
     Name and nature of the business
     Amount of investment by each partner
     Duties, rights, and responsibilities of each partner
     Procedures for sharing profits and losses
     How assets will be divided when and if the partnership is
    dissolved
    General Partners and Limited Partners

    General Partners Limited Partners

     A business partner who  A business partner who


    has decision-making does not take an active
    authority, takes an active role in decision making or
    role in the operation, and running the business
    has unlimited liability for  Usually a partner who will
    all losses or debts of the provide $$ for the
    partnership to run, but
    partnership does not want to
     All partnerships have at participate in actually
    least one general partner running the business
    Advantages of the Partnership
     Easy set-up
     More skills and knowledge (more people to pull ideas from)
     Available capital (more sources for $$ to get business running)
     Total control by partners
     Profits taxed once
    Disadvantages of the Partnership
     Unlimited liability
     Possible disagreement among partners (you are responsible for
    actions of your partner)
     Shared profits
     Limited life
    Review
    1. What is an entrepreneur?
    2. What are the advantages of a sole proprietorship?
    3. What are the disadvantages of a sole proprietorship?
    4. What is on the partnership agreement?
    5. What’s the difference between a general partner and a
    limited partner?
    6. What are the advantages of a partnership?
    7. What are the disadvantages of a partnership?

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