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Business & Other Organizations

Business & Other Organizations. Sole Proprietorships. Most common form of business Owned and run by one person Almost no requirements. Advantages. Ease of start up Ease of management Owner enjoys profits No separate taxes Psychological satisfaction Ease of ending business.

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Business & Other Organizations

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  1. Business & Other Organizations

  2. Sole Proprietorships Most common form of business Owned and run by one person Almost no requirements

  3. Advantages Ease of start up Ease of management Owner enjoys profits No separate taxes Psychological satisfaction Ease of ending business

  4. DISADVANTAGES Unlimited liability Difficulty raising financial capital Size and efficiency Limited managerial experience Difficulty attracting qualified employees Limited life

  5. http://politicalcalculations.blogspot.com/2008/02/us-unemployment-insurance-and-workers.htmlhttp://politicalcalculations.blogspot.com/2008/02/us-unemployment-insurance-and-workers.html Unemployment and Comp tax rate – state by state https://www.labor.state.ny.us/ui/employerinfo/interest-assessment-surcharge.shtm NYS Dept of Labor – new rates http://www.earnmydegree.com/online-education/learning-center/education-value.html Avg yearly income

  6. Partnerships • Jointly owned by two or more • Least numerous form of business • Smallest proportion of sales

  7. Types of Partnerships • General Partnership – all partners are responsible for management and financial obligations of the business • Limited Partnership – at least one partner is not active in the daily running of the business

  8. Forming a Partnership • May be legal paperwork needed • Specify arrangements between partners • How profits are divided • How to add/subtract partners • How to distribute assets if business ends • Etc.

  9. advantages Ease of establishment Ease of management Can attract financial capital Slightly larger size Easier to attract top talent

  10. disadvantages Each partner responsible for acts of others Limited life Potential for conflict

  11. corporations Recognized by law as a separate legal entity Has rights of an individual One fifth of all firms in U.S. 90% of all sales

  12. advantages Ease of raising capital Professional managers to run the firm Limited liability for owners Unlimited life Ease of transferring ownership

  13. disadvantages Difficult and expensive to get a charter Owners have little say Double taxation of profits Subject to government regulations

  14. Non Profit Organizations • Operates in a businesslike way to promote the collective interests of its members. • Not for financial gain

  15. Cooperatives • Is a business that belongs to the people who use it. • Owned and operated by a group of individuals for their mutual benefit.

  16. Cooperatives • Consumer Cooperatives – voluntary association that buys bulk amounts on behalf of members. • Service Cooperatives – voluntary association that provides services to its members. • Producer Cooperatives – voluntary association of producers that helps promote or sell its products.

  17. Labor, Professional and Business Organizations • Labor Unions- organization of workers (UAW, AFL-CIO) represents its member’s interests in employment issues. • Professional Associations – organization of specialized occupations (AMA, ADA, ABA) –work to improve working conditions, skill levels. • Business Associations – organization of businesses (BBB, C of C) – promote collective interests.

  18. Government • Direct Role – produce and distribute goods and services to consumers • Public Utilities • FDIC • USPS • Police/fire protection • Roads/libraries/parks/schools • Indirect Role – acts to make sure economy operates smoothly • Regulate certain industries

  19. Franchises • A right granted to an individual or group to market a company's goods or services within a certain territory or location. • McDonalds • Subway • UPS Store

  20. Franchises • Advantages • Corporate Image • Low Failure Rate • Training • Savings in time

  21. Franchises • Disadvantages • Cost • Restrictions • Limited Growth • Guilt by Association

  22. Merger • When firms merge, one gives up its separate legal identity • Grow faster • Efficiency • Acquire new product line • Eliminate rivals • New identify

  23. Mergers • Types of Mergers • Horizontal Mergers – takes place when two or more firms that produce the same kind of product, join forces. • Chase National and Bank of Manhattan • Vertical Mergers – firms in different steps of manufacturing or marketing join together • Automaker merging with tire company

  24. Conglomerates • A corporation becomes so large through mergers and acquisitions. • Has at least four businesses • Each making unrelated products • None of which is responsible for a majority of its sales. • Diversification is the main reason

  25. Multinationals • A corporation that has manufacturing or service operations in a number of different countries. • Subject to law in that country • Pay taxes in that country • New technology and new jobs for host country • Abuse their power by paying low wages • And exporting scarce natural resources

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