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