Business Structures
What is a business owned by one person?
Sole Proprietorship
What level of management is responsible for setting company goals and planning for the future?
Top-Level Management
What is one advantage of a sole proprietorship?
Full control, keeps all profit, easy to start
What document should partnerships create to outline rights, responsibilities, and profit distribution?
Partnership Agreement
A business model where someone operates a location under an established brand.
What is a franchise?
What is a business owned by two or more people who share profits?
Partnership
Who reports to top managers and oversees different departments?
Middle-Level Management
What is one disadvantage of a sole proprietorship?
Unlimited liability, hard to get high-quality employees, responsible for all debts
What does LLC stand for?
Limited Liability Company
What is one perk of owning a franchise?
Brand recognition, established business model, and support from the franchiser
What type of business is owned by multiple shareholders and does not dissolve when ownership changes?
Corporation
Which management level supervises employees and ensures daily tasks are completed?
Low-Level Management
What is one advantage of a partnership?
Shared workload, combined skills, easy to establish
Why is liability important in business?
It determines who is legally responsible for debts and damages
What is one downside to owning a franchise?
Lack of independence, high initial fees, ongoing royalties
What type of business combines elements of a partnership and a corporation?
LLC
Name one job title for a Middle-Level Manager.
General Manager, Department Head, Regional Manager, Director (Mr. Wiltrout)
What is one disadvantage of a partnership?
Split profits, responsible for partner’s debts, potential disagreements
What does a corporation sell to raise capital?
Stocks
How is a non-profit different from a for-profit business?
It focuses on a cause instead of making money
What business structure allows someone to use an established brand’s name while following strict guidelines?
Franchise
What is one key responsibility of a Top-Level Manager?
Studying competition, setting business strategies, making major decisions
What is a major advantage of a corporation?
Can raise money by selling stocks, does not dissolve when ownership changes
What is a major legal advantage of forming an LLC?
It protects personal assets like houses and cars from business debts
What is the biggest challenge for non-profit businesses?
Securing funding through donations and grants instead of profit
Which business structure is designed to focus on a cause rather than making a profit?
Non-Profit Organization
What is a key responsibility of a Low-Level Manager?
Supervising employees, ensuring work is completed, handling day-to-day operations
What is a disadvantage of a corporation?
Government regulation, taxed twice, expensive to start
Why does the government closely regulate corporations?
Because they have many employees and financial responsibilities
What is a common type of non-profit organization?
Charities, schools, religious organizations
What is the main reason an entrepreneur might choose an LLC over a sole proprietorship?
To protect their personal assets from business debts.
Why is it important for Top-Level Managers to study the competition?
To stay competitive and make informed strategic decisions.
What is the biggest financial risk of running a sole proprietorship?
The owner is personally responsible for all business debts
What happens if a partnership does not have a legal agreement?
Disputes over profits, ownership, responsibilities, and liability
How does a franchisee pay the franchiser?
By paying franchise fees and royalties