MGMT 1 Chapter Notes - Chapter 5: Splenda, Horizontal Integration, Perrier
Document Summary
Ch 5 - how to form a business basic forms of business ownerships. Sole proprietorship - owned and managed by one person. Partnership - 2 or more people legally agree to become co-owners of a business. Corporation - legal entity w authority to act and have liability apart from its owners sole proprietorships - easiest advantages. Unlimited liability - risk of personal losses; any debts/damage incurred are yours and must pay them. Few fringe benefits - no paid health insurance, disability insurance, pension plan, sick leave, vacation pay. General partner - owner (partner) who has unlimited liability and is active in managing the firm. Limited partner - owner who invests money in the business but doesn"t have management responsibility or liability for losses beyond their investment. 3 elements of any general partnership: common ownership + shared profits and losses + right to participate in managing operations of the business advantages. Shared management and pooled/complementary skills and knowledge.
