types of agribusinesses. what are the 3 types of agribusinesses? single (sole) proprietorship...
TRANSCRIPT
- Slide 1
- Types of Agribusinesses
- Slide 2
- What are the 3 types of agribusinesses? Single (sole) Proprietorship Partnership Corporation
- Slide 3
- What 3 types of corporations are there? Subchapter C Regular corporations Subchapter S Family Farms and Small Businesses Subchapter 7 Cooperatives
- Slide 4
- Single (Sole) Proprietorship Ownership One person Start Up Costs Large amount of capital by owner Taxes Pay only once on the income from the company Example Tractor Repair Shop
- Slide 5
- Single (Sole) Proprietorship Liability Unlimited (personal and business assets of owner) Responsibility for Decisions owner
- Slide 6
- Single (Sole) Proprietorship Major Advantages Simple to start Be your own boss Few government regulations Choose own products & hours Pay taxes only once on income from company Receive all profits
- Slide 7
- Single (Sole) Proprietorship Major Disadvantages Limited financial resources (capital needed to begin) Difficulty in management Overwhelming time commitment Limited growth Restriction of expansion potential Few fringe benefits
- Slide 8
- Partnership Ownership General (all is shared) Start Up Costs Shared by partners Taxes Income taxed only once Example Ag. Machinery Dealership, Landscape Business
- Slide 9
- Partnership Liability Shared in General Partnership but not unlimited. Responsibility for Decisions Shared between partners in a general partnership
- Slide 10
- Partnership Major Advantages More financial resources Shared management & pooled knowledge Longer survival Special skills of partner Pay no taxes as a business Limited government regulations
- Slide 11
- Partnership Major Disadvantages Division of profits Disagreement among partners Difficult to terminate Dissolved when partner dies or leaves the partnership Divided management authority
- Slide 12
- Corporation Ownership Many people Start Up Costs From multiple sources Taxes Business is taxed (double taxation) Example Phillip Morris, Procter & Gamble, Kroger
- Slide 13
- Corporation Liability Business only (not personal) Responsibility for Decisions Board of Directors
- Slide 14
- Corporation Major Advantages More money for investment Perpetual life Ease of ownership change Draw talented employees Separation of ownership from management Legal entity
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- Corporation Major Disadvantages Initial cost Paperwork Two tax returns (double taxation) Difficulty of termination Possible conflict with board Must follow state laws Owners have limited control
- Slide 16
- Cooperative Ownership Owned & controlled by members Start Up Costs Buy shares Taxes Most are exempt (if 50% of business with members & profits returned in dividends) Example Land O Lakes, Sunkist
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- Cooperative Liability Members risk only the amount they have invested Limited Responsibility for Decisions Each member gets one vote
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- Cooperative Major Advantages Continues at death of shareholders Benefits go to members Share in direction of business Broad capital base Special tax advantage Legal entity
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- Cooperative Major Disadvantages Legal formalities Limited control over business Expensive to form, maintain, & dissolve Few persons may gain excessive power Lack of member participation
- Slide 20
- Franchise Ownership Buy Franchise name & products Start Up Costs Large Start Up & Franchise Costs Taxes Business is taxed Example McDonalds
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- Franchise Liability Limited Responsibility for Decisions Management (from above)
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- Franchise Major Advantages Nationally recognized name & reputation Help with finding a good location Management system with successful track record Successful methods for inventory and operations Financial advice & assistance Training for owners & staff
- Slide 23
- Franchise Major Disadvantages Additional costs for marketing Monthly percentage of gross sales may go to parent company Competition from other franchises Regulations: management, dcor, selling, rules Coattail effects if other franchises fail nationwide