ksu.e mediamanagement.2
TRANSCRIPT
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Advanced eMedia Management
A. Brian DenglerSeptember 5, 2012
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Meet Jean Poole
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Meet Jean Poole
• She started a hyperlocal site, “The Local Scoop” that covers local news in Bucksnort, Tennessee.
• She owns a nice house.
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The Local Scoop
• Jean Poole hires Rex Carr to post articles for her.
• Rex writes a story that Jack Pott embezzled $30,000 from the Bucksnort National Bank.
• The story isn’t true.
Photos by Krystian_O under Creative Commons License
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The Local Scoop
• Jean and Rex are sued for defamation. • A jury finds Jean liable for $100,000 for
defamation as publisher of the Local Scoop.• Jean goes out of business and loses her house.• What went wrong?
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The Problem
• Jean operated The Daily Scoop as a “Sole Proprietor.”
• She did not create a corporation that would shield her business from personal liability.
• This is the reason why we begin the course with looking at business organizations.
• You don’t want to lose your shirt managing emedia.
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Business Organizations
• Sole Proprietor• Partnership• Limited Liability Corporation• Corporation• Non-profit Corporation
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Sole Proprietor
• An individual runs a business. • There is no formal requirement to set up the
business.• The individual gets all the profits --- and all the
liability.• The individual’s personal assets, that is, bank
accounts, property, are exposed to pay debts and liabilities.
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Partnership
• Two or more individuals set up a business.• You need a partnership agreement to divide
profits and manage the business. • How can a partner get out of the business? • For any liabilities – like bank loans –
partnership assets are used first to satisfy any debt.
• Individual partners are liable.
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Limited Liability Corporation
• Very Popular. Owners are “members,” not stockholders.
• You need an agreement to manage relationships among members.
• You need to incorporate with state. You need articles and bylaws.
• Only company assets are exposed to liability.• No double tax – income (profits) are up-
streamed to members.
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Corporation
• Applies to large companies that sell stock to multiple shareholders.
• Incorporators need to file articles of incorporation with state, have by-laws.
• Double taxation – corporation pays income tax, shareholders taxed additionally for sale of stock or dividends.
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Corporations
• Publicly traded stock must be registered with the SEC.
• Corporation must provide quarterly and annual filings on performance.
• Corporations usually managed by board of directors.
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So…what’s the big deal?
Jean Poole forms “The Local Scoop LLC”
Rex Carr isEmployee of LLC
Jack Pott can recover only from Rex and LCC. Jean gets to keep her house.
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What if you do PR for a Company?
• Coca-Cola wants to set up a blog that provides solely human interest stories about persons who benefit from Coke charities.
• Users are allowed to submit comments.
• Users may post defamatory comments or pictures that violate copyrights.
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What if you do PR?
Coke sets up “Coke Blog LLC” to run Blog
Users upload content that may be a problem
Another entity sues for copyright infringement, etc. Coke isolated from liability.
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Non-Profit Corporation
• Must incorporate as non-profit under state law.
• Must incorporate for educational and charitable purposes.
• Must file for 501(c)(3) exemption.• No owners.• Pay people.
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Quiz
• Quiz No. 1 is located at http://www.proprofs.com/quiz-school/story.php?title=ksu-advanced-emedia-management-quiz-no-1-952012
• Your responses are due 11:59 pm, September 11, 2012.
• Keep track of your answers. ProProfs does crash!!