Bell WorkCompany Ownership

Read pages 147-149 of Chapter 16 in the Manufacturing book

Company Ownership

Types of Ownership1. Proprietorship:

- one owner (proprietor)- usually small businesses- usually only needs a business

license- able to easily change- may be difficult to raise

additional money for growth

- limited by proprietors talents- proprietor assumes unlimited

liability

2. Partnership:

- two or more people run business together

- shared responsibility, talents, and profits

- accepts unlimited liability

- may not get along

3. Corporation:- legally created business unit- may own property, can sue or be sued- owners usually don’t run the company- owners may buy or sell their

part of ownership - owners have little say in daily operations- owners assume limited liability

Forming a Corporation:

1. articles of incorporation

- an application

2. corporate charter

- authorization

3. corporate bylaws

- instructions for how the company will be run

Types of Liability (responsibility)1. unlimited liability –

owner is responsible for all debts of the company, even after closing2. limited liability:

- the corporation assumes debts not the owner personally

- owners may collect dividends- owners may lose initial investment but are not responsible for

outstanding debt

LLC:

- Limited Liability Company

- a hybrid type of ownership

- the business assumes limited liability but is not a

corporation

- owners have more flexibility than a corporation

Franchise

- an authorization or license between a parent company and a private business- gives the right to use the parent company’s name, and/or sell their products or services

- examples = Sweet Frog, Allstate, NAPA

A franchise will allow- a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)- the franchisee the right to market a product or service using the operating methods of the franchisor- the franchisee the obligation to pay the franchisor fees for these rights- the franchisor the obligation to provide rights and support to franchisees

Franchise.org

What types of responsibilities do the owner or corporation have?