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Business Organizations. Business Organizations. Sole Proprietorships. Advantages. Disadvantages. Keep all profits Easy to manage “Be your own boss” Easy to start / end No special taxes. Difficult to raise capital Unlimited Liability Inefficient Don’t attract the best employees.
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Business Organizations Business Organizations
Sole Proprietorships Advantages Disadvantages • Keep all profits • Easy to manage • “Be your own boss” • Easy to start / end • No special taxes • Difficult to raise capital • Unlimited Liability • Inefficient • Don’t attract the best employees
Partnerships Advantages Disadvantages • Limited Liability (L.P.) • Shared losses • Easier to manage • No special taxes • Easier to raise capital • More efficient • Unlimited Liability (G.P.) • Share profits • Potential for owner disagreement • More difficult to start • Limited Life
Why “Go Public?” Why “Go Public?” • Corporation: WWE • Date Went Public: Oct 19, 1999 • Shares Offered (mil.): 10.00 • IPO Price: $17.00 per share • Offering Amount (mil.): $170.00
Corporations Advantages Disadvantages • Easy to raise capital • Limited Liability • Share losses • Economies of scale • Attract best workers • Unlimited Life • Easy to Transfer Ownership • Can issue bonds • Share profits • Difficult to start • Little say in day-to-day operations • Corporate income tax – Double Taxation • Government regulation
Hybrid Organizations LLC LLP • Limited Liability Corporation or Limited Liability Company • Limited Liability Partnership Advantages and disadvantages vary, depending on the law of the state in which and LLP or LLC operates.
Cooperatives • Consumer Cooperatives • Service Cooperatives • Producer Cooperatives
Well, sort of… Consumer Cooperatives
Non-Profit Organizations • A Non-Profit Organization (NPO) has no owners who receive profits if the revenues of the business exceed its costs. • NPOs are legally constituted and their goals typically center on activities of public or private interest without any commercial or monetary profit purposes. • NPOs are active in a wide range of areas, including the public service, charity, philanthropy, education, and religion.
Labor Unions Groups of people who work in the same industry (or for the same company) who come together to achieve some common goal(s). Better Pay Better Working Conditions Job Security
Professional Associations Groups of people who work in the same profession (usually “white collar” jobs) that come together to promote the public perception of their profession
Business Associations Business Association – a group of unrelated businesses that comes together to help its members market their products.
Business Expansion • Mergers • Conglomerates • Multinationals
Mergers • Horizontal Merger • Vertical Merger • Conglomerate Merger
Conglomerates • Companies that operate four or more distinct businesses, none of which constitutes more than 50% of their total revenue. • Translation: Companies that do lots of different “stuff”
Multi-Nationals • Companies that operate in more than one nation.
The Government • Protector • Regulator • Consumer • Producer • Provider