Transcript Slide 1
Partnerships & Corporations Ms. Ramos Alta Loma High School What Kinds of Businesses are Best Organized as Partnerships? Ms. Ramos Partnerships: Multiple Owners, Shared Profits Owned by two or more May be formed orally Examples Family businesses Medical/law practices Small stores/farms Ms. Ramos Types of Partnerships General Partnership Unlimited liability Active in operations Limited (“silent”) Partnership Contribute $ leave operations to “general partner” Limited liablility Ms. Ramos Limited Liability Partnership Operate like gen partners Protection of limited liability Ms. Ramos Advantages Ease of start-up Few restrictions Shared decision-making Specialization Individual taxation Increased growth potential Ms. Ramos Disadvantages Unlimited liability Conflict btwn partners Continuity issues Ms. Ramos What to do when sole prop/ partnership needs more $$$? Ms. Ramos Venture Capital: $ from investor/ org in exchange for share of ownership Sell Stock Ms. Ramos Why Are Large Businesses Organized as Corporations? Ms. Ramos Corporation: ownership by shareholders Treated as person under the law Owned by shareholders Types Privately held Publicly held Ms. Ramos Ben & Jerry’s Partnership 1978 Stock sold to Vermont residents only 1984 $750k Sold publicly to expand outside of Vermont Ms. Ramos How Corp are Organized Board of Directors: oversee mgmt Chief Executive CEO Corporate Officers Middle Mgmt: dept heads & managers Employees Ms. Ramos Advantages Limited liability Growth potential Professional Mgmt Long Life Ms. Ramos Disadvantages Complexity of start-up Loss of control More govt regulation: shareholder mtgns & SEC Double taxation: corp & shareholder dividends Ms. Ramos Corp must: Prospectus Articles of Incorporation/Corporate Charter Corporate Bylaws Shareholder mtgns & elect Board Issue Stock Certificates Ms. Ramos Multinational Corp: Doing Business on a Global Scale Existed since? 1600s- English & Dutch trading in East Indies 3,OOO in 1990. In 2003? 63,000 w/ 821,000 branches & 90 million employees Ms. Ramos Most have fewer than 250 employees Branches must obey laws of country located in Ms. Ramos Advantages Success to more markets Increased sales Less likely to go bankrupt Access to cheap labor & raw materials Ms. Ramos