Most common form of businessMost common form of business
Owned and run by one personOwned and run by one person
Almost no requirementsAlmost no requirements
Ease of start upEase of start up
Ease of managementEase of management
Owner enjoys profitsOwner enjoys profits
No separate taxes No separate taxes
Psychological satisfactionPsychological satisfaction
Ease of ending businessEase of ending business
Unlimited liabilityUnlimited liability
Difficulty raising financial capitalDifficulty raising financial capital
Size and efficiencySize and efficiency
Limited managerial experienceLimited managerial experience
Difficulty attracting qualified employeesDifficulty attracting qualified employees
Limited lifeLimited life
http://www.earnmydegree.com/online-education/learning-center/education-value.htmlAvg yearly income
https://www.labor.state.ny.us/ui/employerinfo/interest-assessment-surcharge.shtmNYS Dept of Labor – new rates
http://politicalcalculations.blogspot.com/2008/02/us-unemployment-insurance-and-workers.htmlUnemployment and Comp tax rate – state by state
Jointly owned by Jointly owned by two or moretwo or more
Least numerous Least numerous form of businessform of business
Smallest Smallest proportion of proportion of
salessales
Types of PartnershipsTypes of Partnerships
General Partnership – all partners are General Partnership – all partners are responsible for management and responsible for management and financial obligations of the businessfinancial obligations of the business
Limited Partnership – at least one Limited Partnership – at least one partner is not active in the daily partner is not active in the daily running of the businessrunning of the business
Forming a PartnershipForming a Partnership
May be legal paperwork neededMay be legal paperwork neededSpecify arrangements between Specify arrangements between
partnerspartnersHow profits are dividedHow profits are dividedHow to add/subtract partnersHow to add/subtract partnersHow to distribute assets if business endsHow to distribute assets if business endsEtc.Etc.
Ease of establishmentEase of establishment
Ease of managementEase of management
Can attract financial capitalCan attract financial capital
Slightly larger sizeSlightly larger size
Easier to attract top talentEasier to attract top talent
Each partner responsible for acts of Each partner responsible for acts of othersothers
Limited lifeLimited life
Potential for conflictPotential for conflict
Recognized by law as a separate Recognized by law as a separate legal entitylegal entity
Has rights of an individualHas rights of an individual
One fifth of all firms in U.S.One fifth of all firms in U.S.
90% of all sales90% of all sales
Ease of raising capitalEase of raising capital
Professional managers to run the firmProfessional managers to run the firm
Limited liability for ownersLimited liability for owners
Unlimited lifeUnlimited life
Ease of transferring ownershipEase of transferring ownership
Difficult and expensive to get a Difficult and expensive to get a chartercharter
Owners have little say Owners have little say
Double taxation of profitsDouble taxation of profits
Subject to government regulationsSubject to government regulations
Non Profit OrganizationsNon Profit Organizations
Operates in a businesslike way to Operates in a businesslike way to promote the collective interests of its promote the collective interests of its members.members.
Not for financial gainNot for financial gain
CooperativesCooperatives
Is a business that belongs to the Is a business that belongs to the people who use it.people who use it.
Owned and operated by a group of Owned and operated by a group of individuals for their mutual benefit.individuals for their mutual benefit.
CooperativesCooperativesConsumer Cooperatives – voluntary Consumer Cooperatives – voluntary
association that buys bulk amounts on association that buys bulk amounts on behalf of members.behalf of members.
Service Cooperatives – voluntary association Service Cooperatives – voluntary association that provides services to its members.that provides services to its members.
Producer Cooperatives – voluntary Producer Cooperatives – voluntary association of producers that helps promote association of producers that helps promote or sell its products.or sell its products.
Labor, Professional and Business Labor, Professional and Business OrganizationsOrganizations
Labor Unions- organization of workers (UAW, Labor Unions- organization of workers (UAW, AFL-CIO) represents its member’s interests in AFL-CIO) represents its member’s interests in employment issues.employment issues.
Professional Associations – organization of Professional Associations – organization of specialized occupations (AMA, ADA, ABA) –specialized occupations (AMA, ADA, ABA) –work to improve working conditions, skill work to improve working conditions, skill levels.levels.
Business Associations – organization of Business Associations – organization of businesses (BBB, C of C) – promote collective businesses (BBB, C of C) – promote collective interests.interests.
GovernmentGovernmentDirect Role – produce and distribute goods Direct Role – produce and distribute goods
and services to consumersand services to consumersPublic UtilitiesPublic UtilitiesFDICFDICUSPSUSPSPolice/fire protectionPolice/fire protectionRoads/libraries/parks/schoolsRoads/libraries/parks/schools
Indirect Role – acts to make sure economy Indirect Role – acts to make sure economy operates smoothlyoperates smoothlyRegulate certain industriesRegulate certain industries
FranchisesFranchises
A right granted to an individual or A right granted to an individual or group to market a company's goods group to market a company's goods or services within a certain territory or services within a certain territory or location. or location.
McDonaldsMcDonaldsSubwaySubwayUPS StoreUPS Store
FranchisesFranchisesAdvantagesAdvantages
Corporate ImageCorporate Image
Low Failure RateLow Failure Rate
TrainingTraining
Savings in timeSavings in time
FranchisesFranchises
DisadvantagesDisadvantages
CostCost
RestrictionsRestrictions
Limited GrowthLimited Growth
Guilt by AssociationGuilt by Association
MergerMerger
When firms merge, one gives up its When firms merge, one gives up its separate legal identityseparate legal identityGrow fasterGrow fasterEfficiencyEfficiencyAcquire new product lineAcquire new product lineEliminate rivalsEliminate rivalsNew identifyNew identify
MergersMergers
Types of MergersTypes of MergersHorizontal Mergers – takes place when two or Horizontal Mergers – takes place when two or
more firms that produce the same kind of more firms that produce the same kind of product, join forces.product, join forces.Chase National and Bank of ManhattanChase National and Bank of Manhattan
Vertical Mergers – firms in different steps of Vertical Mergers – firms in different steps of manufacturing or marketing join togethermanufacturing or marketing join togetherAutomaker merging with tire companyAutomaker merging with tire company
ConglomeratesConglomerates
A corporation becomes so large A corporation becomes so large through mergers and acquisitions.through mergers and acquisitions.
Has at least four businessesHas at least four businessesEach making unrelated productsEach making unrelated productsNone of which is responsible for a None of which is responsible for a
majority of its sales.majority of its sales.Diversification is the main reasonDiversification is the main reason
MultinationalsMultinationals
A corporation that has manufacturing or A corporation that has manufacturing or service operations in a number of service operations in a number of different countries.different countries.
Subject to law in that countrySubject to law in that countryPay taxes in that countryPay taxes in that countryNew technology and new jobs for host New technology and new jobs for host
countrycountryAbuse their power by paying low wagesAbuse their power by paying low wagesAnd exporting scarce natural resourcesAnd exporting scarce natural resources