Business Ethics and Social Responsibility - Forms of Business Organization and Their Role in Socio-Economic Development

Flashcards about Business Ethics and Social Responsibility, including business organizations and their role in socio-economic development.

Sole/Single Proprietorship

Owned by one person; the simplest and most common form of business organization.

Advantages of Sole/Single Proprietorship

Relatively low start-up costs, greatest freedom from regulation, owner in direct control of decision making, minimal working capital, tax advantages to owner.

Disadvantages of Sole/Single Proprietorship

Unlimited liability, lack of continuity, difficulty raising capital.

Partnership

Business organization owned by two or more persons.

Advantages of Partnership

Ease of formation, relatively low start-up cost, additional sources of investment capital, possible tax advantages, limited regulation.

Disadvantages of Partnership

Unlimited liability, lack of continuity, divided authority, difficulty raising additional capital, hard to find suitable partners.

General Partnership

All partners share in gain and losses, and all have unlimited liability for all debts.

Limited Partnership

One or more general partners will run the business with unlimited liability, but there will be one or more limited partners who will not actively participate in the business.

Corporation

A legal entity that is separate from its owners.

Advantages of Corporation

Limited liability, specialized management, ownership is transferable, continuous existence, separate legal entity, easier to raise capital.

Disadvantages of Corporation

Closely regulated, charter restrictions, extensive record keeping necessary, double taxation of dividends, possible development of conflict between shareholders and executives.

Cooperative

A duly registered association of persons with a common bond of interest, voluntarily joining together to achieve their social, economic, and cultural needs.

Advantages of Cooperative

Owned and controlled by members, democratic control, limited liability, profit distribution to members.

Disadvantages of Cooperative

Less incentive to invest additional capital, extensive record keeping necessary, participation of members required for success, longer decision-making process.

Business

An activity that is part and parcel of human society; it is an entity in which economic resources or inputs, such as materials and labor, are put together and processed to provide goods or services or outputs to customer.

Organization

An entity, such as a company, an institution, or an association, comprising one or more people and having a particular purpose.

Business Organization

Refers to how a business is structured.

Socio-economic development

The field of study that examines social and economic factors to better understand how the combination of both influences business and industry with the intention to improve the economy of one Country.

Small businesses owned by sole proprietors and business partners contribution to socio-economic development

Recognized worldwide as significant contributors to economic development and job creation.

Corporations contribution to socio-economic development

Drive economic stability and growth by providing valuable services, products, and taxes to maintain the infrastructure of a community.

Cooperatives contribution to socio-economic development

Create opportunities for women and minorities to start and run businesses.