Intro to business unit 2

What is a sole proprietorship?

A business structure where one individual is responsible for all work with unlimited liability and it is very simple to start.

What is a partnership?

A business owned by two or more people who split the benefits and profits, but also have unlimited liability.

What defines a corporation?

A large business owned by shareholders that continues to exist independently of its owners, and is taxed at the business level.

What is a franchise?

A business model that gives authorization to an individual or group to operate a business using the franchisor's trademarks and business model, typically for a high cost.

What is an LLC?

Limited liability company that combines aspects of sole proprietorships and corporations, offering limited liability to its owners.

What is the role of lower management?

First level managers who take orders from higher management and supervise employees.

What is the role of middle management?

Managers who oversee specific groups of departments and execute goals set by upper management.

What is the role of upper management?

Executives like the president or CEO responsible for the overall control, goal-setting, and success of the business.

Why are legal documents important in a partnership?

They provide clear rules and define how partners split profits and losses, protecting each partner's rights and financial interests.

What are the benefits of opening a franchise?

Lower risk of failure and established branding that can generate significant profits.

What are some downsides of a franchise?

High initial costs and limited control over store operations and creativity.

Why does a heavy burden fall on upper management?

They are accountable for the company's success and are the public face of the business, receiving backlash for failures.

How does middle management execute business goals?

They take objectives from upper management and implement them within their specific departments.

What responsibilities do lower managers have?

They supervise employees and ensure that directives from higher management are carried out.