Intro to business unit 2

  1. Responsible for all work. Unlimited liability, super simple to start.

  2. Partnership: a business owned by two or more people. Split the benefits and profits. Unlimited liability.

  3. Corporation: a large business that is owned by shareholders. Business does not fall apart when a manager leaves. The business is taxed, then the people are taxed from what the business makes.. 

  4. Franchise: a business giving authorization to an individual for a high cost 

  5. LLC: limited liability company: sole proprietorship and corporation

  6. Lower Management: first level managers- takes the order from managers above.

  7. Middle Management:branch managers, in charge of groups in departments

  8. Upper Management:president, ceo, bod, in charge of controlling the entire business, sets goals and policies, accountable for the success of the business. Creating and establishing the goals for the company.




  1. What are legal documents? Why are they needed when a business has more than one owner? Legal documents give clear rules, financial statements, etc. this defines how the partners split losses and profits. This document protects each partner and their personal profits and taxes. The legal documents prevent disputes and fallouts with the people owning the business. If disputes happen, the document justifies their rights. 





  1. Explain why one may want to open up a franchise? What are some of the downsides?



Opening a franchise can be beneficial because it can make a lot of money, since the name is popular. The brand is already established, and they receive support from the franchisor. They also have a lower risk of failing. A downside to a franchise is that it costs a lot of money to be a part of the business, and you are not in full control of your store or creativity. 



  1. What is the role of upper management? Why does such a heavy burden fall on them?

The upper management is the head of a business. They are responsible for the success and they control the people working for the business. If the business fails they receive the backlash for it and the fault since they make decisions. They are the public eye of the business. 




  1. What is the role of middle management?

The middle management is responsible for certain groups of departments. They take goals from the top managers and plan to execute them within their departments. 



  1. What is the role of lower management? The lower managers take all the orders from higher management. They direct the employees and supervise them.