1、Chapter 1,Forms of Business Ownership,Forms of Business Ownership,Lecture Outline,Sole Proprietorships 个人企业,Partnerships 合伙制企业,Corporations 公司,Joint Ventures 合资企业,Limited Liability Companies 有限责任公司,Mergers & Acquisitions 企业兼并与收购,Franchises 特许经营,Forms of Business Ownership,Lead-in activities,How many
2、 Chinese and foreign companies can you name? Do you know what forms of business ownership they are? What is your most admired corporation? What company do you wish to work for? Why?,Forms of Business Ownership,Lead-in activities,Sample:,Forms of Business Ownership,Lead-in activities,Sample:,Forms of
3、 Business Ownership,Additional activities,Do you know the symbols of the following companies and their forms of business ownership?,Forms of Business Ownership,Sole Proprietorship,An organization that is owned, and usually managed, by one person is called a sole proprietorship.,A sole proprietorship
4、 is the oldest and most common type of business.,Examples: a virtual assistant working from her/his home, a woodworker selling at craft fairs and a freelance consultant offering his services to local businesses.,Forms of Business Ownership,Sole Proprietorship,Advantages, Owner in direct control (you
5、 are your own boss)., Keeping the profits from the business, The easiest form of business to start, No double taxation,DOUBLE TAXATIONThe imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of s
6、ales taxes),Forms of Business Ownership,Sole Proprietorship,Disadvantages, Total (unlimited) personal liability., Limited financial resources (capital)., Lack of continuity as a result of disability or death of owner., Owner may have limited managerial expertise.,Forms of Business Ownership,1, Why i
7、s the sole proprietorship one of the most popular forms of business ownership?, Why would unlimited liability be considered as one of the biggest drawbacks to sole proprietorships,Sole Proprietorship,Questions for discussion,Forms of Business Ownership,Partnerships,A partnership is a legal relations
8、hip between persons carrying on a profit-motivated business Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.,Forms of Business Ownership,Partnerships,Three key elements, common ownership, shared profits and losses, the right to
9、participate in managing the operations of business,Forms of Business Ownership,Partnerships,Two types of partnerships, General partnership, Limited partnership,Forms of Business Ownership,Partnerships: General Partnership,Advantages, Simple organization. Additional personal resources (financial and
10、managerial). The right to select partners. Low start-up (organizational) costs. Limited outside regulation. No double taxation.,Forms of Business Ownership,Partnerships: General Partnership,Disadvantages, Unlimited liability for partnership obligations., Lack of continuity in event of death or disab
11、ility of one partner., Sharing of profits., All profits are taxed as personal income., Difficult to raise additional capital., Hard to find suitable partners., Divided authority (limited decision making).,Forms of Business Ownership,Partnerships: Limited Partnership,Advantages, General partner maint
12、ains control of the business., Limited partner can invest with a limit on personal liability., Easy way to secure capital., Business not taxed directly.,Forms of Business Ownership,1,Partnerships: Limited Partnership,Disadvantages, More complex to organize., Limited partner has no control over the b
13、usiness., General partner has unlimited personal liability for the obligations of the business., Lack of continuity in event of death or disability of the general partner.,Forms of Business Ownership,Partnerships: Limited Partnership,Disadvantages, More complex to organize., Limited partner has no c
14、ontrol over the business., General partner has unlimited personal liability for the obligations of the business., Lack of continuity in event of death or disability of the general partner.,Forms of Business Ownership,Partnerships,Questions for discussion, What are the differences between a limited p
15、artner and a general partner?, How would you decide whether to team up with someone in a partnership form of business?,Corporations,It is empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.,Th
16、e corporation is a legal entity, allowed by legislation, which permits a group of people, as shareholders (for-profit companies) or members (non-profit companies), to create an organization, which can then focus on pursuing set objectives.,Corporations,Types of Corporation,Corporations,Types of Corp
17、oration,Corporations,Advantages,Limited personal liability: means that the owners of a business are responsible for losses only up to the amount they invest Skilled management team: Professional managers are trained and experienced career executives.,Corporations,Advantages,Transfer ownership: Share
18、holders have the right to sell their shares of a corporations stock to whomever they please Greater capital base: The corporate form of business makes it easier for a business to grow and expand. Through the issuance of shares, corporations may be able to access the money they will need for expansio
19、n. Stability: A Corporation has an unlimited life.,Corporations,a sole proprietorship or partnership: if an owner should die, all of his business assets may require “probate“ in order to be passed on to his or her heirs or devisees. corporation or Limited Liability Companies (LLC): shares of stock (
20、or membership interests in the LLC) can be issued to family members or other owners to clearly delineate their ownership interests in the business.,Additional Info,Transfer of business interests to succeeding generations:,Corporations,Disadvantages,Double taxation: The corporation has to pay taxes o
21、n its profits. The shareholders must also pay income tax on the dividends they receive through ownership.,the imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes).,Additional Info
22、,Double taxation,Corporations,Disadvantages, Government involvement: Provincial and state Governments have the right by law to exercise certain controls on, and to require corporations to maintain proper corporate records. Lack of secrecy: A corporation must provide each shareholder with an annual r
23、eport. The reports present data on sales volume, profit, total assets, and other financial matters.,Corporations,Disadvantages, Lack of personal interest: In most corporations, management and ownership are separate. This separation can result in a lack of personal interest in the success of the corp
24、oration. Credit limitations: If a corporation fails, its creditors can look only to the assets of the business to satisfy claims.,Corporations,Disadvantages, Lack of personal interest: In most corporations, management and ownership are separate. This separation can result in a lack of personal inter
25、est in the success of the corporation. Credit limitations: If a corporation fails, its creditors can look only to the assets of the business to satisfy claims.,Corporations,Corporations:have an easier time obtaining financing than a sole proprietorship; have several people making management decision
26、s, and the entity continues in the event of illness or the death of one of the partners; can raise money through stock offerings.,Additional Info,Differences With Sole Proprietorships:,Corporations,Sole proprietorship: a lender is entirely dependent on the business owners ability to repay the loan w
27、ith his own labor. cant sell stock to raise funds for equipment or expansion.,Additional Info,Differences With Sole Proprietorships:,Corporations,Whats the difference between an open and a closed corporation? Why do most young people prefer to work for a large corporation?,Questions for Discussion:,
28、Joint Ventures,A joint venture (JV) is the pooling of resources and expertise by two or more businesses, typically from different areas or countries to achieve a particular goal. The risks and rewards of the enterprise are also shared.,Partnerships occur when two or more entities decide to work toge
29、ther in a business.,Joint Ventures,business expansion development of new products moving into new markets, particularly overseas.,Reasons behind the formation of a joint venture:,Joint Ventures,access to new markets and distribution networks; increased capacity; the sharing of risks with a partner;
30、access to specialized staff and technology.,Advantages:,Joint Ventures,If the objectives of the venture are not 100 per cent clear, or not communicated to all the staff involved, problems are likely to arise. There is an imbalance in levels of expertise, investment, or assets brought into the ventur
31、e by the different partners.,Disadvantages:,Joint Ventures,Different cultures and management styles result in poor integration and cooperation between the partners. The parent businesses dont provide sufficient leadership and support in the early stages.,Disadvantages:,Joint Ventures,Additional Info
32、,Joint Ventures,Additional Info,Joint Ventures,Additional Info,Joint Ventures,What ownership is a joint venture similar to? Why? What are the advantages of a joint venture?,Questions for Discussion:,Limited Liability Companies,A Limited Liability Company (LLC) is a type of business ownership combini
33、ng several features of corporation and partnership structures.,It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.,Its formation is more complex and formal than that of a general partnership.,Limited Liabili
34、ty Companies,Like a corporation, the owners (called “members“) of the LLC are not personally responsible for the debts of the LLC.,Like a partnership, there is no dual taxation and the earnings of the business are taxed directly to the members.,Limited Liability Companies,Advantages,Limited liabilit
35、y: Members cannot be held personally liable for debts unless they have signed a personal guarantee.,Flexible profit distribution: Limited liability companies can select varying forms of distribution of profits.,Limited Liability Companies,Advantages,No minutes: The LLC business structure requires no
36、 corporate minutes or resolutions and is easier to operate.,No double taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax.,Limited Liability Companies,Disadvantages,Limi
37、ted liability: a LLC is dissolved when a member dies or undergoes bankruptcy.,Going public: it is hard to go public.,Added complexity: A LLC may be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default (违约) may apply.,Limited L
38、iability Companies,Additional Info,有限责任公司是根据美国五十个州中某一州的法律而设立的非法人商业实体。通常必须有两个或两个以上的所有者，称为“成员”；但在一些州，如加利福尼亚州、特拉华州和纽约州，也允许一人设立有限责任公司。有限责任公司的成员可以是个人或实体，美国人或外国人皆可。有限责任公司成员人数并无上限规定。,Limited Liability Companies,Additional Info,有限责任公司是美国各州法律规定的一种比较新的公司模式，在很短时间内就成为了一种大受欢迎的所有权形式。它的产生满足了商人们的需要、即提供了一种具有（1）有限责任（
39、公司也具备有限责任的特征，但合伙并不具备条件）和（2）合伙型运营的灵活性的法律实体。有限责任公司的价值还体现在：无论成员对管理的参与程度如何，所有成员只以其出资额为限承担责任。实际上，有限责任公司是公司和合伙的嫁接产物。,Limited Liability Companies,Additional Info, 现行中国公司法规定的公司分为有限责任公司和股份有限公司。从西方公司理论看，公司根据不同条件可做多种分类。例如根据是否适用有限责任分为有限责任公司和无限责任公司。 有限责任公司最显著的特征是，股东以其出资额为限对公司承担责任，公司以其全部资产对公司的债务承担全部责任，不能公开募股。 股份有
40、限公司区别于有限责任公司的最为重要的特征是：其全部资本分为等额股份，股东以其所持有的股份对公司承担责任，公司以其全部资本对公司的债务承担责任，例如上市公司。,Limited Liability Companies,Additional Info,A limited liability company could be converted into a company limited by shares.,Limited Liability Companies,Additional Info,Note: 中美公司的名称有时没法一一对应翻译，因为两国之间公司法对公司的定义不同，比如中国的“股份有限
41、公司”就无法对应英文。 美国公司名称通常为：Xxx company Xxx Co, Ltd (corporation limited)Xxx Inc. (Incorporated),Mergers & Acquisitions,The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of diffe
42、rent companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.,Mergers & Acquisitions,A Merger is the result of the combination of two companies (or corporations) to form a new company. An Acquisition is one company
43、buying the property and obligations of another company.,Mergers & Acquisitions,When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer “swallows“ the business
44、 and the buyers stock continues to be traded.,Mergers & Acquisitions,In the pure sense of the term, a merger happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely refer
45、red to as a “merger of equals“. Both companies stocks are surrendered and new company stock is issued in its place. E.g Both Daimler-Benz and Chrysler ceased to exist when the two firms merged, and a new company, DaimlerChrysler, was created.,Types of corporate mergers,A horizontal merger joins firm
46、s in the same industry and allows them to diversify or expand their products. In a horizontal merger, the acquisition of a competitor could increase market share.,Types of corporate mergers,A vertical merger is the joining of two firms involved in different stages of related businessesa manufacturer
47、 merging with a supplier of component products, or a manufacturer merging with a distributor of its products.,Types of corporate mergers,A conglomerate merger unites firms in completely unrelated industries. The primary purpose of a conglomerate merger is to diversify business operations and investm
48、ents.,Types of corporate mergers,Additional Info,Process:,Types of corporate mergers,Additional Info,Types of corporate mergers,Additional Info,Types of corporate mergers,Questions for Discussion:,What is the difference between mergers and acquisitions? Give more examples to explain horizontal merge
49、rs, vertical mergers and conglomerate mergers.,Franchising,A franchise is the right to use a business name and sell products or services, usually in a specific geographical territory. Franchising is the practice of using another firms successful business model. The word franchise is of Anglo-French
50、derivation - from franc - meaning free, and is used both as a noun and as a (transitive) verb,Franchising,For the franchisor, the franchise is an alternative to building chain stores to distribute goods that avoids the investments and liability of a chain. The franchisors success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.,
