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Civics and Economics Chapter 9 Lesson 1
Transcript of Civics and Economics Chapter 9 Lesson 1
2. Partnership - A business is owned by two or more individuals
3. Corporation - An organization that has
a legal identity separate from its owners
- Each type of business organization has a different form of ownership
- Two or more individuals own a business
- Single Owner
Ticket out of the Door
Types of Business Ownership
- The word proprietor means owner
- Proprietorships are the most common type of business
- East to set up and run
Owner makes all of the deisions and keeps all of the profits
- Proprietorships are limited by the ability and resources of their owner
- Owner takes on all of the risks and is responsible for all debts
The owner must pay all debts even if they are greater than the amount the owner invested
- Unlimited liability
- Partnerships benefit from bringing more resources to the business than the single owner can
Partners share decision-making, risks, and profits
Partnerships (like proprietorships) also have the problem of unlimited liability
Lesson 1: Business Organizations in U.S. Economy
Starting a business
Chapter 9: Operation of the
United States Economy
CE. 12a- The student will demonstrate knowledge of the structure and operation of the United States economy by describing the types of business organizations and the role of entrepreneurship
Standards and Objectives
1.Explain the role entrepreneurs play in the United States economy
2. Explain what the three types of business organizations are in the United States economy
3. Identify at least two characteristics of each type of business organization
1. Why are entrepreneurs so important to the United States
2. What are the three types of business ownerships in the
United States economy?
3. Give an example of each type of business ownership.
- Entrepreneurs invest their money and other resources in a business
- If the business succeeds,
they make a profit
- If the business fails,
they can lose their investment
An entrepreneur is someone willing to take the risk of loss to produce goods and services for the possibility of making profit
- A corporation is an organization with its own legal identity separate from its owners
- A state government gives a corporation a charter to operate
- A corporation can own property, make contracts, pay taxes, and can be sued
A corporation often has many owners, called stockholders.
- Stocks are shares of ownership in the corporation
- If the business does well, stockholders share in the profits
- If the business fails, stockholders lose the money they invested
- Stockholders are not responsible for the corporation's debts
Called limited liability
- This is a very important advantage of a corporation
People form corporations to protect themselves from liability (debt)
- Corporations can raise large amounts of money from stocks, but they cost a lot to set up