<p> Chapter 3 Business Organizations</p><p>Essential Questions: </p><p>3-1 EQ: What are the characteristics each of the 3 forms of business organizations? 3-2 EQ: How can reinvestment help with a company’s economic growth? 3-3EQ: What is a non profit organization? Give an example.</p><p>3-1 Forms of Business Organizations</p><p>I. ______- A business run by one person </p><p> i. ______type of business organization in ______. ii. Typically the most numerous and______. </p><p>A. Advantages: i. Easy to ______. ii. Easy to ______. iii. ______gets all the profit iv. The business does not______, only the owner does v. Easy to ______the business</p><p>B. Disadvantages i. The owner has ______. ii. Difficult to raise financial______. iii. Owner may not be able to hire as many______necessary to reach maximum efficiency iv. Difficult to attract ______v. Owner may have limited ______experience</p><p>Individual Question Why do you think that so many business owners are sole proprietors despite the fact that they hold unlimited liability?</p><p>______</p><p>II. Partnerships 2. A partnership is a business jointly owned by ______persons. i. It is the ______among businesses ii. It has the 2nd smallest proportion of ______.</p><p>A. General partnerships are a type if business in which ______are involved in the management and finances</p><p>B. In a limited partnership, at ______partner is not involved in management. </p><p>C. Articles of the partnership document spell out how the partners divide up the ______. D. Advantages i. ______. ii. Ease of management iii. Easier to raise ______through bank loans or a new partner iv. Easier to attract skilled ______.</p><p>E. Disadvantages i. Partners are responsible for the acts of each and every partner ii. Limited life of a partnership ends if ______. iii. Potential for partner ______.</p><p>III. Corporations 3. A corporation is a ______recognized by law as a separate legal entity with all the rights of an individual i. They receive a charter to create a corp. which includes the details about ______. ii. Investors who buy ______in a corporation become owners of the firm</p><p>Advantages i. Ease of ______ii. Professionals may run the firm instead of the owners (shareholders) iii. Owners have ______iv. Business’s life is unlimited v. Easy to ______ownership</p><p>B. Disadvantages i. A charter is ______ii. Owners and managers are separate so shareholders have little say in running the business iii. Corporate income is ______vi. Subject to government______</p><p>Discussion Question Who really are the owners of a corporation?</p><p>______</p><p>VI. Government and Business Regulation</p><p>A. Federal and State Governments regulate ______and utility rates.</p><p>B. State governments may offer industrial development ______to help industries relocate or tax credits to draw investments</p><p>3-1 EQ What are the characteristics each of the 3 forms of business organizations?</p><p>______3-2 Business Growth and Expansion</p><p>I. Growth through Reinvestment</p><p>A. Business Revenue can be used to invest in factories, machinery or new ______</p><p>B. Before reinvesting, a business must estimate its ______.</p><p>Total Sale- (expenses + tax + depreciation) = net income</p><p>C. The depreciated value is added back to the net income to get the company’s cash flow (bottom line) which is the real ______.</p><p>D. Business owners can then decide whether part or all of the cash flow should be reinvested to generate additional sales and increased profit</p><p>II. Growth through Mergers A. When firms merge, one gives up its separate ______.</p><p>B. A company may merge to grow faster, become more efficient, acquire or deliver a better product, or ______.</p><p>C. A horizontal merger is the joining of firms that make the same product Example: ______</p><p>D. A vertical merger is the joining of firms involved in ______of manufacturing or marketing</p><p>E. A conglomerate is composed of four or more businesses each making unrelated products, none of which is responsible for a majority of its sales</p><p>F. A multinational is a corporation with manufacturing and service operations in______, which are subjected to each nation’s business regulations.</p><p>Discussion Question Why have some multinational companies been criticized?</p><p>______</p><p>3-2 EQ How can reinvestment help with a company’s economic growth?</p><p>______3-3 Other Organizations</p><p>I. Community and Civic Organizations A. A non-profit organization is in business to promote its members collective interests, ______.</p><p>B. Many non-profit organizations incorporate to take advantage of a corporation’s unlimited life and ______liability.</p><p>C. If it has money after it’s expenses are paid, its board of directors may apply the surplus to other projects that further the organization’ s ______.</p><p>II. Cooperatives A. A cooperative is a voluntary association of people who carry on an economic activity that ______its members. </p><p>B. Consumer cooperatives buy food and other necessities in bulk. Members donate______to the co-op and members pay lower prices for ______.</p><p>C. Service co-ops such as______, offer services to their members at lower rates.</p><p>D. Producer co-ops help members, ______, promote or sell their products</p><p>III. Labor, Professional, and Business Organizations A. ______represent workers’ interests and negotiate with management through collective bargaining.</p><p>B. ______set standards for those in the professional an influence govt. policies on issues concerning their member’s interests. </p><p>C. ______are industries or trade associations that represent specific kinds of businesses. Some also help to protect the consumer. </p><p>IV. Government A. The Government plays ______in the economy when its agencies produce and distribute goods and services to consumers.</p><p>B. Govt. corporations have board of directors, but Congress’s money rather than ______money, support their work.</p><p>C. The govt. plays an indirect role when it regulates ______or when it grants money to people in the form of social security and student ______.</p><p>3-3 EQ What is a non profit organization. Give an example. ______</p>