chapter 4 forms of business ownership business today
TRANSCRIPT
Chapter 4Chapter 4
Forms of Business Forms of Business OwnershipOwnership
BusinessBusiness TodayToday
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How to Categorize Companies by Sector
Growth of the Service Sector– Factors in Service Sector Growth
• Increase demand for service• Demographic changes• Number & complexity of goods increasing• Complex global economy• Technology
Service businesses
Goods-producing businesses
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How to Categorize Companies by Sector
Growth of the Service Sector– Service Sector Segments
• Retailing & wholesaling• Finance & insurance• Transportation & utilities• Other services
Capital-intensive businesses
Labor-intensive businesses
Barriers to entry
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How to Categorize Companies by Sector
Production’s Revival– Manufacturing– Construction– Mining– Agriculture
Commodity business
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Categorizing Companies
Sole Proprietorship– Advantages
• Ease of establishment• Work for yourself• Make your own decisions (hours)• Keep all the profits• Privacy
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Categorizing Companies
Sole Proprietorship– Disadvantages
• Limited financial resources• Pay more for credit• Unlimited liability• Limited life
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Categorizing Companies
Partnerships– Advantages
• Easy to form• Diversity of skills brought to
the business• Increase the chances that
the organization will endure
General partnership
Limited partnership
Master limited partnership (MLP)
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Categorizing Companies
Partnerships– Disadvantages
• Unlimited liability• Interpersonal problems
– Strategic Business Partnerships• Consortium• Cooperatives
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Categorizing Companies
Corporations– Advantages
• Limited Liability• Liquidity• Produce goods more efficiently• Reach more customers• Finance projects internally
Shareholders
Stock
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Categorizing Companies
Corporations– Disadvantages
• Required to follow certain government rules
• Required to publish finance & operations information
• Corporate profits are taxed twice
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Corporations– Types of Public Corporations
• Government-owned corporations• Quasi-government corporations
Categorizing Companies
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Corporations– Types of Private Corporations
• Open corporation• Closed corporation• S corporation• Limited liability companies• Subsidiary corporations• Holding companies
Categorizing Companies
Publicly traded
Not publicly traded
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Categorizing Companies
Corporate Structure and Governance– Shareholders– Board of Directors– Officers
• CEO
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Mergers & Acquisitions
Types of Mergers– Horizontal Merger– Vertical Merger– Conglomerate Merger
How Mergers Occur– Hostile Takeover
Merger
Acquisition
Divestiture
Trusts
Tender offer
Proxy fight
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Mergers & Acquisitions
Current TrendsThe DebateMerger & Acquisition Defenses
Poison Pill Shark Repellent
Golden Parachute White Knight