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The Firm and Its Environment - Coggle Diagram
The Firm and Its Environment
The Importance of Business
Production of Goods & Services
State of Economy
Satisfaction of Needs
Main Types of Businesses
Partnership
Association of Two or More People
Advantages
Easy to Organize
Quick Decisions
Profits -> Few people
Success/Failure -> Owner
Disadvantages
Unlimited Liability
Debts -> Owner
Limited Life
Limited
General
Sole Proprietorship
One-owner Business
Advantages
Easy to Organize
Quick Decisions
All Profits -> Owner
Disadvantages
Limited Resources
Lack of Capital
Unlimited Liability
Debts -> Owner
Limited Life of the Business
Corporations
Hundreds/Thousands of Small Investors
Rights & Duties of an Individual
Right to buy/ sell/ own property
Ability to Make Legal Contracts
Hire and Fire Workers
Set Prices
Be sued/fined/taxed
Charter of Incorporation
Shares of Stock
Board of Directors
Manages Resources
Dividends Issues
Reinvestment of Profit
Advantages
Limited Liability
Large Amounts of Money
Issue of Bonds / Shares
Unlimited Life
Ease of Ownership Transfer
Disadvantages
Complex Bureaucratic Issues
Regular Dividends
Detailed Records
Double Taxation
A Small Income From Dividends
Lack of Control of the Owners