1、Forms of Business Forms of Business OwnershipOwnershipSole Proprietorship An organization that is owned,and An organization that is owned,and usually managed,by one personusually managed,by one personThe sole proprietor is usually an The sole proprietor is usually an active manager,working in the sh
2、op active manager,working in the shop everyday.everyday.ADVANTAGESADVANTAGESYou can be your own boss.You can be your own boss.You can make business decisions without You can make business decisions without having to ask anyone else.having to ask anyone else.You also get to keep the profit from the Y
3、ou also get to keep the profit from the business and have the freedom to wind up business and have the freedom to wind up your business whenever you want.your business whenever you want.It is the easiest form of business to start.It is the easiest form of business to start.DISADVANTAGESDISADVANTAGES
4、It is often difficult for the owner to raise capital.The owner is personally responsible for all the aspect of the business.He/She has unlimited liability.The owner must spend long hours working.It is also difficult to hire and keep high-achievement employees.PARTNERSHIPSPARTNERSHIPSA legal relation
5、ship between persons carrying on a profit-motivated business.It may be a partnership between two people,or among thirty;the law doesnt set a limit on how many partners may be involved.Three key elements of any general partnership are mon ownership 2.share profits and losses and 3 the right to partic
6、ipate in managing the operations of the business.TWO TYPES OF PARTNERSHIPTWO TYPES OF PARTNERSHIP A general partnership:a business with at A general partnership:a business with at least one general partner who has least one general partner who has unlimited liability for the debts of the unlimited l
7、iability for the debts of the business,business,A limited partnership:an arrangement A limited partnership:an arrangement where a person can contribute to a where a person can contribute to a business without being involved in the business without being involved in the affairs of the partnership.aff
8、airs of the partnership.ADVANTAGESADVANTAGESA partnership allows two or more people to work together and bring different skills and resources to the business.When two or more people pool their money and credit,it is easier to pay the rent,utilities,and other bills incurred by a business.DISADVANTAGE
9、SDISADVANTAGESBecause the partnership is not considered to be separate from its owners,the partners are personally responsible for liabilities of the partnership.There exists division of profits.There may be disagreements among partners.It is usually difficult to terminate.JOINT VENTURESJOINT VENTUR
10、ESJoint venture is the pooling of resources and expertise by two or more business,typically from different areas or countries to achieve a particular goal.The risks and rewards of the enterprise are shared.Partnerships occur when two or more entities decide to work together in a business.ADVANTAGESA
11、DVANTAGESIf successful,a joint venture can offer:access to new markets and distribution networks.increased capacity.the sharing of risks with a partner.access to specialised staff and technology.A joint venture is that it isnt as final as a merger or takeover.DISADVANTAGESDISADVANTAGESIf the objecti
12、ves of the venture are not 100 per cent clear,or not communicated to all the staff involves,problems are likely to arise,There is an imbalance in levels of expertise,investment or assets brought into the venture by the different partners.Different cultures and management styles result in poor integr
13、ation and cooperation between the partners.The parent businesses dont provide sufficient leadership and support in the early stages.LIMITED LIABILITY LIMITED LIABILITY COMPANIESCOMPANIES a type of business ownership combining several features of corporation and partnership structuresIt is not a corp
14、oration or a partnership.Its owners are called members not shareholders or partners.The number of members are unlimited and may be individuals,corporations,or other LLCs.ADVANTAGESADVANTAGESLimited liabilityFlexible profit distributionNo minutes（无会议记录）Flow through taxation转移课税DISADVANTAGESDISADVANTA
15、GESLimited lifeGoing public(上市)Added complexityCORPORATIONSCORPORATIONSThe corporation is a legal entity,allowed by legislation,which permits a group of people,as shareholders(for-profit companies),to create an organization,which can then focus on pursuing set objectives,and empowered with legal rig
16、hts which are usually only reserved for individuals,such as to sue and be sued,own property,hire employees or loan and borrow money.The primary advantage of a for-profit corporation is that it provides its shareholders with a right to participate in the profits(by dividends)without any personal liab
17、ility because the company absorbs the entire liability of the organization.TYPES OF CORPORATIONSTYPES OF CORPORATIONSPrivate:attempts to earn a satisfactory profit.Public:owned and run by the governmentClosed:stock held by only a few owners and not actively sold on the stock marketOpen:stock held by
18、 numerous people and actively sold on the stock marketMunicipal:cities and townships that carry out businessDomestic:incorporated in one province or country and doing business within that province or countryTYPES OF CORPORATIONSTYPES OF CORPORATIONSForeign:incorporated in one province or country and
19、 doing business in another province or countryAlien:incorporated in one nation and operating in another nationNon-profit:service organization incorporated for limited-liability statusNON-PROFIT CORPORATIONSNON-PROFIT CORPORATIONSThey are not profit-seeking enterprises,such as many universities and r
20、eligious organizations.The not-for-profit enterprise is prohibited,by law,from distributing any earnings to owners.It exists because the founders believe that the firm provides something(e.g.help to the homeless,education)of value that is not being provided well or at all by other enterprise.The not
21、-for-profit firms provide jobs for millions of employees.ADVANTAGESADVANTAGESLimited liabilitySkilled management teamTransfer of ownershipGreater capital basestabilityDISADVANTAGESDISADVANTAGESMultiple taxationDifficulty and expense of startingGovernment involvement Lack of secrecyLack of personal i
22、nterestCredit limitationNatureNatureA legal entityA legal entityan artificial legal“person”an artificial legal“person”With the approval of the With the approval of the appropriate appropriate governmental authoritygovernmental authorityformation of a national bank vs.an formation of a national bank
23、vs.an ordinary corporationordinary corporationFormationFormationIncorporators(=3)apply for a charterIncorporators(=3)apply for a charterTo prepare and file the articles of To prepare and file the articles of incorporationincorporationIncorporators hold an organization Incorporators hold an organizat
24、ion meeting to elect the first board of meeting to elect the first board of directors and adopt the corporations directors and adopt the corporations bylawsbylawsFormationFormation contdstock stock assets assetsstockholdersstockholdershave a voice in the have a voice in the control and management of
25、 the control and management of the companycompanyWith voting stockWith voting stockvote at the annual meetingvote at the annual meetingparticipate in the election of the board participate in the election of the board of directorsof directorsFormationFormation contdboard of directorsboard of director
26、soverall management overall management selects officersselects officersofficersofficersimplement the policies of the board of implement the policies of the board of directorsdirectorsmanage everyday affairsmanage everyday affairsCharacteristicsCharacteristicsSeparate legal entityLimited liabilityTra
27、nsferability of ownershipContinuity of existenceCapital-raising capabilityTaxationRegulation and supervisionSeparate Legal EntitySeparate Legal Entityto run business apart from ownersto run business apart from ownersStockholdersStockholdersreceive stock certificatesreceive stock certificatesownershi
28、p interestsownership interestsare separate and distinct from the are separate and distinct from the corporationcorporationLimited LiabilityLimited LiabilityThe liability of stockholders is limited to their equity in the corporationDistribution to shareholderslimited Board of directors formally decla
29、res a dividend to make distribution of retained earnings legalTransferability of OwnershipTransferability of OwnershipSharesroutinely transferredThe corporationnotes transfers of ownershipContinuity of ExistenceContinuity of ExistenceStocks transferabilityStocks transferabilityStockholder liquidate
30、investment by Stockholder liquidate investment by selling it at a price negotiated with a selling it at a price negotiated with a buyer,orbuyer,orat the exchanges quoted market price if at the exchanges quoted market price if the stock is trade on a stock exchangethe stock is trade on a stock exchan
31、geCapital-raising CapabilityCapital-raising CapabilityCharacteristics ofCharacteristics ofLimited liability of stockholdersLimited liability of stockholdersStock transferabilityStock transferabilityEnhance the ability of the corporation to Enhance the ability of the corporation to raise capital byra
32、ise capital byissuing shares of stockissuing shares of stockTaxationTaxationCorporations are subject toCorporations are subject tofederal income taxes on their earningsfederal income taxes on their earningsshareholders:income taxesshareholders:income taxesstate income taxesstate income taxesreal est
33、ate taxreal estate taxpersonal property taxpersonal property taxfranchise taxfranchise taxRegulation&SupervisionRegulation&SupervisionState lawsState laws limit the powers a corporation may limit the powers a corporation may exerciseexerciseIdentify reports that must be filedIdentify reports that mu
34、st be filedDefine the rights and liabilities of Define the rights and liabilities of stockholdersstockholdersRegulation&Supervision Regulation&Supervision contdcontdIf stock is issued to the publicIf stock is issued to the publiccomply with the laws governing the sale of comply with the laws governi
35、ng the sale of corporate securitiescorporate securitiesIf stock is listed and traded on organized If stock is listed and traded on organized security exchangessecurity exchangesvarious reporting and disclosure various reporting and disclosure requirementsrequirementsChairmanChairman vs.vs.CEOCEO vs.
36、vs.PresidentPresidentChairmanChairman Chairman of the Board Chairman of the BoardAppoint CEO&PresidentCall for board meetingUppermost representative of shareholdersDismiss anyone except Member of the Board&Member of the Board of SupervisorsSource of executive power,in theoryStrong power vs.honoraryC
37、hairmanChairman vs.vs.CEOCEO vs.vs.PresidentPresident contdcontdPresidentPresidentcame into existence earlier than CEOwith real power and social statusnot many shares in the modern organizationsimilar to general manager in ChinaChairmanChairman vs.vs.CEOCEO vs.vs.PresidentPresident contdcontdCEOCEOc
38、an be used on executive officerwithout privilege and honorhighest executive power and responsibility within some area,e.g.Band of BrothersMERGERS&ACQUISITIONSMERGERS&ACQUISITIONSA merger is the result of the combination of two companies(or corporations)to form a new company.An acquisition is one com
39、pany buying the property and obligations of other company.THREE MAJOR TYPES OF THREE MAJOR TYPES OF MERGERSMERGERSA horizontal merger joins firms in the same industry and allows them to diversify or expand their productsA vertical merger is the joining of two firms involved in different stages of re
40、lated businessesa manufacturer merging with a supplier of component products,or a manufacturer merging with a distributor of its products.A potential competition merger(conglomerate)unites firms in completely unrelated industries.The primary purpose is to diversify business operations and investment
41、.FRANCHISESFRANCHISESA franchise is the right to use a business name and sell products or services,usually in a specific geographic territoryADVANTAGESADVANTAGESIt is a way to reduce risk and receive support from a large network.The preliminary work has been done with an infrastructure well establis
42、hed,a product line in place,and the marketing strategy developed.The customer bas may be set,sometimes with good name recognition.The franchiser usually provides management assistance and training and may offer financial support.DISADVANTAGEDISADVANTAGEA franchise offers less freedom than an indepen
43、dent business.The franchiser often demands a large share of the profits,referred to as royalty payments(专利权税).The reputation of one franchisee could be adversely affected by the fallings of others.Many franchisees face restrictions in the reselling of their franchises with transfer of ownership poss
44、ibly requiring approval of the franchiser.CASE STUDY:McDonaldsCASE STUDY:McDonaldsBrand franchisingMcDonalds owns or leases the site and the restaurant building.The franchisee buys the fittings,the equipment and the right to operate the franchise for twenty years.To ensure uniformity throughout the
45、world,all franchisees must use standardized McDonalds branding,menus,design layouts and administration systems.CASE STUDY:McDonaldCASE STUDY:McDonalds sAdvantages for the franchisee:Advantages for the franchisee:Being their own bossSelling a well established,high quality productIntensive initial tra
46、iningContinuous supportBenefit from national marketing carried out by McDonaldsForecasting CASE STUDY:McDonaldCASE STUDY:McDonalds sAdvantages for the franchiserAdvantages for the franchiserFranchises bring entrepreneurs,full of determination and ideas,into the organization.Franchising enables McDon
47、alds to enjoy considerably faster growth and the creation of a truly global brand identity.Economies of scaleFinancial benefitScope for innovationBusiness start-Business start-upupWHAT DOES IT TAKE TO BE WHAT DOES IT TAKE TO BE AN ENTREPRENEURAN ENTREPRENEURTrait NO.1:seeing opportunity where others
48、 do not.Trait NO.2:self-motivatedTrait NO.3:willing to make sacrificesTrait NO.4:know where they are headedTrait NO.5:arent afraid to fail HOW TO DISCOVER A HOW TO DISCOVER A WINNING BUSINESSWINNING BUSINESSExamine your own skill set for business ideas.Keep up with current events and be ready to tak
49、e advantage of business opportunities.Invent a new product or service.Add value to an existing productInvestigate other markets.Improve an existing product or service.Get on the bandwagon.HOW TO START UP YOUR HOW TO START UP YOUR BUSINESSBUSINESSEvaluating your chance for successGetting startedBuild
50、ing a business planOrganizing your businessEVALUATING YOUR CHANCE EVALUATING YOUR CHANCE FOR SUCCESSFOR SUCCESSMarket assessmentFinancing assessmentGETTING STARTEDGETTING STARTEDLearn from othersGet some experienceBUILDING A BUSINESS A BUILDING A BUSINESS A PLANPLANA business plan is a detailed writ
