BUS110 Chap 5 - How to Form a Business
•Als PPT, PDF herunterladen•
13 gefällt mir•8,405 views
How to Form a Business
![BRIAN SCUDAMORE 1-800-GOT-JUNK? * * ,[object Object],[object Object],[object Object],Profile 5-](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
Empfohlen
Empfohlen
Weitere ähnliche Inhalte
Was ist angesagt?
Was ist angesagt? (20)
Ähnlich wie BUS110 Chap 5 - How to Form a Business
Ähnlich wie BUS110 Chap 5 - How to Form a Business (20)
Mehr von Deborah Oronzio
Mehr von Deborah Oronzio (20)
Kürzlich hochgeladen
Kürzlich hochgeladen (20)
BUS110 Chap 5 - How to Form a Business
- 1. * * Chapter Five How to Form a Business Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 4. FORMS of BUSINESS OWNERSHIP * * Basic Forms of Business Ownership LG1 5-
- 8. TYPES of PARTNERSHIPS * * Partnerships LG2 5- General Limited GP GP GP GP GP Passive Investor Passive Investor Passive Investor
- 13. HOW OWNERS AFFECT MANAGEMENT * * Advantages of Corporations LG3 5-
- 15. PRIVACY PLEASE The Ten Largest Private Corporations in the U.S. * * Source: Forbes, www.forbes.com , November 2008. Advantages of Corporations LG3 5- Company State Industry Cargill MN Farming Koch Industries KS Chemicals Chrysler MI Automobiles GMAC Financial Services MI Financial PricewaterhouseCoopers NY Business Services Mars VA Food Bechtel CA Construction HCA TN Hospitals Ernst & Young NY Business Services Publix Supermarkets FL Grocery
- 21. TYPES of MERGERS * * Corporate Expansion: Mergers and Acquisitions LG4 5- Conglomerate – completely unrelated industries Vertical – different stages of related business. Horizontal – same stage of same industry No Relationship between companies
- 24. FRANCHISING * * Advantages & Disadvantages of Franchises LG5 5- Advantages Disadvantages Management & marketing assistance Personal ownership Recognized name Financial advice & assistance Lower failure rate High start-up costs Shared Profit Management regulation Coattail effects Restrictions on selling Fraudulent franchisors
- 29. Review Only
- 31. OLDIES BUT GOODIES America’s Oldest Corporations * * Individuals Can Incorporate LG3 5- Company Year Started Type of Company J.E. Rhoads & Sons 1702 Conveyer Belts Covenant Life Insurance 1717 Insurance Philadelphia Insurance 1752 Insurance Contributorship Dexter 1767 Adhesives & Coatings D. Landreth Seed 1784 Seeds Bank of New York 1784 Banking
Hinweis der Redaktion
- See Learning Goal 1: Compare the advantages and disadvantages of sole proprietorships.
- See Learning Goal 1: Compare the advantages and disadvantages of sole proprietorships. Although corporations make up only 20 percent of the total number of businesses, they make 81 percent of the total receipts. Sole proprietorships are the most common form (72 percent), but they earn only 6 percent of the receipts.
- See Learning Goal 1: Compare the advantages and disadvantages of sole proprietorships. This slide helps students understand why sole proprietorships account for the largest number of businesses in the United States.
- See Learning Goal 2: Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships. Each type of partnership has advantages and disadvantages. In a general partnership resources are pooled and liability is spread among all partners. However in this type of partnership there is the possibility for disagreement and/or personality conflicts. A limited partnership is made up of a mixture of general partners and limited partners. Limited partners cannot actively take part in business dealings.
- See Learning Goal 2: Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships. The limited partner is not able to exercise any management control over the partnership but maintains limited liability. A limited partner’s liability is limited to the amount invested in the partnership.
- See Learning Goal 2: Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships. Each type of partnership has advantages and disadvantages. In a general partnership resources are pooled and liability is spread among all partners. However in this type of partnership there is the possibility for disagreement and/or personality conflicts. A limited partnership is made up of a mixture of general partners and limited partners. Limited partners cannot actively take part in business dealings.
- See Learning Goal 2: Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships. Partnerships have some distinct advantages. The key advantage is that partnerships have access to more resources such as financial, management and knowledge.
- See Learning Goal 2: Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships. Successful partnerships start with a shared vision. In order to develop a successful partnership all partners must be honest with each other and bring a variety of different skills to the partnership. Suggestions to discuss with students regarding partnerships: Partnership agreements must be in writing! Each individual’s responsibilities to the company must be in writing and included as part of the contract. Make certain that provisions are in place if one or more partners want to terminate the agreement. (Information outlining the terms and conditions of terminating any agreement, should be outlined in the original contract.)
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. Identify that the major advantage of corporate ownership is the limited liability protection (personal assets are protected). Interesting facts regarding incorporating a business: the cost for a business to Incorporate ranges from about $50 to over $300, plus states fees. Over half of Fortune 500 companies choose to incorporate in Delaware because the state’s laws makes the process easier than it is in other states.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. World’s Largest Corporations This slide presents Fortune’s 2008 top 10 U.S. corporations. Ask the students: Several of the companies in the top ten deal with similar products/services. How are the products/services these companies sell similar? (Exxon Mobil, Chevron, ConocoPhillips are all oil majors and Valero Energy is a processor of oil.)
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. Largest Private Companies This slide presents America’s top 10 private companies in 2008. The list has changed recently with the Cerberus Capital purchase of Chrysler from Daimler and their purchase of GMAC Financial Services from General Motors. Ask the students to debate why a company may want to remain private? (Some of the reasons may be control, privacy, no external pressure, and preference.)
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. An S corporation looks like a corporation but is taxed like a sole proprietorship or partnership. The primary advantage of an S corporation is that it avoids the double taxation of a C corporation. Approximately 3 million US companies operate as an S corporation.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. Originally to qualify as an S Corporation the number of shareholders was limited to 75; this has now been amended to no more than 100.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. Advantages and disadvantages of LLCs are listed in this slide. The biggest advantages that should be pointed out with LLCs are limited liability and flexibility.
- See Learning Goal 4: Describe three types of corporate mergers, and explain the role of leveraged buyouts and taking a firm private.
- See Learning Goal 4: Describe three types of corporate mergers, and explain the role of leveraged buyouts and taking a firm private. There are three types of mergers. Horizontal mergers take place in the same industry, i.e., one competitor merging with another. An example of this would be Daimler Mercedes Benz merging with Chrysler to create DaimlerChrysler in the 1990s. Vertical merger takes place between companies in a value chain, for example a supplier and a distributor merging. Conglomerate merger has no relationship between companies, both Tyco and General Electric operate as conglomerates.
- See Learning Goal 4: Describe three types of corporate mergers, and explain the role of leveraged buyouts and taking a firm private.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising. Franchising has a lower failure rate because the franchisee has support from the franchisor. This support can range from marketing to financial.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising. What to Choose? This is valuable information that must be examined by anyone wishing to purchase a franchise. The number-one reason why franchises fail is due to miscalculation of start-up costs and operating costs. Examine all costs carefully. It is important to understand that all franchise opportunities are not created equal. Suggest to the class that anyone interested in a franchise should also follow these additional guidelines: Have an attorney experienced in franchise contracts review the agreement. Hire a CPA to review all financial statements. This is commonly referred to as performing a “Due Diligence.” Interview other franchise owners. Have experience in the industry.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising. High Flyers This slide lists ten high-performing franchises. As mentioned earlier not all franchises are created equal and require careful investigation before considering an investment. Web sites like www.franchise.com provide information such as the cost of thousands of franchise systems. Ask students: What makes an effective franchisor? ( Answers will vary but should include name recognition, financial stability, innovative product and effective business management.)
- See Learning Goal 6: Explain the role of cooperatives.
- See Learning Goal 2: Describe the differences between general and limited partners, and compare the advantages and disadvantages of partnerships. There are two less common forms of partnerships outlined in this slide: master limited partnership and the limited liability partnership. The master limited partnership is unique because it combines the tax benefits of a more traditional partnership and the liquidity of a publicly traded security. One example of a master limited partnership is Kinder Morgan Energy Partners which is engaged in energy storage and operates 26,000 miles of pipelines.
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies. America’s Oldest Companies Interesting slide that identifies those companies that have been in business for over 200 years. A few facts you may wish to address with the students: JE Rhoads & Sons is the oldest company in the U.S. and started off tanning leather for Buggy Whips. Philadelphia Contributorship Insurance was formed based on a suggestion by Benjamin Franklin regarding the establishment of a volunteer fire brigade, which eventually developed into an insurance company. The Bank of New York, New York’s first bank, was opened for business in Lower Manhattan on June 9th, 1784, only a few months after the departure of British Troops from American soil. (Bank of New York merged with Mellon Financial Corporation of Pittsburgh and was renamed Bank of New York Mellon in 2007. Environmental changes in the business world will always happen; those companies that embrace change and provide quality goods and services, will continue to profit. Discuss with the students the significant amount of commitment a company must be prepared to do to stay in business. ( Some areas that must continually be addressed are changes in societal culture, competition, economy, laws/politics, and technology changes.)
- See Learning Goal 3: Compare the advantages and disadvantages of corporations, and summarize the differences between C corporations, S corporations, and limited liability companies.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising. Benefits of a Home-Based Franchise Home-based businesses are growing at an enormous rate. This slide helps clarify some of the reasons why. Share with the class some tips on getting started: Decide on business idea Set goals for the business How many hours do you want to work? How many employees do you want? How much money will you need to get started? Visit www.e-myth.com for more online information regarding startups.
- See Learning Goal 5: Outline the advantages and disadvantages of franchises, and discuss the opportunities for diversity in franchising and the challenges of global franchising.
- The primary advantages of sole proprietors are: Ease of starting and ending the business, being your own boss, pride of ownership. leaving a legacy, retention of company profits, no special taxes. Disadvantages include: Unlimited liability, limited financial resources, management difficulties, overwhelming time commitment, few fringe benefits, limited growth, limited life span. 2) With unlimited liability, the sole proprietor is liable for all debts and obligations of the business and must pay them even if it means selling your home, car, or whatever else you own.
- 1) Before buying a franchise be sure to check a company’s (franchisor’s) resources and reputation. Scams are all over franchising. The checklist on page 134 gives extended advice of factors to consider before buying a franchise. 2) Successful franchising in global markets offers the same opportunities as in domestic markets. However, franchisors must be careful to adapt to the region where they wish to expand. McDonalds’ for example has more than 31,000 restaurants in 119 countries. 3) A cooperative is a form of business that is owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain. Cooperatives are a major force in agriculture and other industries today.
- 1) A general partner is an owner who has unlimited liability and can be active in managing the firm. A limited partner is an owner who invests money in the business, but does not have any management responsibility or liability for losses beyond his or her investment. 2) Some of the advantages of partnerships are: More financial resources, shared management and pooled/complimentary skills and knowledge, longer survival, no special taxes. Disadvantages of partnerships include: Unlimited liability (for general partners), division of profits, disagreements among partners, difficulty of termination.
- Advantages of incorporating a business include: Limited liability, ability to raise more money for investment, size, perpetual life, ease of ownership change, ease of attracting talented employees, separation of ownership from management. Disadvantages of incorporating are: Initial cost, extensive paperwork, double taxation, two tax returns, size, difficulty to terminate, possible conflict with stockholders and board of directors. 2) Stockholders do not have to be employees of the corporation. They are investors who have limited liability. Stockholders elect the board of directors of a company who select the management to control the company. 3) Stockholders in a corporation have limited liability meaning as owners they are responsible for its losses only up to the amount they invested. The corporation could be sued and forced out-of-business but the stockholder would only lose what he/she invested. 4) Limited liability companies have become a popular way to form a business since all fifty states now recognize LLCs. Some of the advantages of LLCs are: Limited liability, choice of taxation (can be taxed as a partnership or corporation, flexible ownership rules, flexible distribution of profit and losses, operating flexibility.