types of agribusinesses
DESCRIPTION
Types of Agribusinesses. What are the 3 types of agribusinesses ?. Single (sole) Proprietorship Partnership Corporation. What 3 types of corporations are there?. Subchapter C Regular corporations Subchapter S Family Farms and Small Businesses Subchapter 7 Cooperatives. - PowerPoint PPT PresentationTRANSCRIPT
Types of Agribusinesses
Types of AgribusinessesWhat are the 3 types of agribusinesses?Single (sole)ProprietorshipPartnershipCorporation
What 3 types of corporations are there?Subchapter CRegular corporationsSubchapter SFamily Farms and Small BusinessesSubchapter 7Cooperatives
Single (Sole) ProprietorshipOwnershipOne personStart Up CostsLarge amount of capital by ownerTaxesPay only once on the income from the companyExampleTractor Repair Shop
Single (Sole) ProprietorshipLiabilityUnlimited (personal and business assets of owner)Responsibility for Decisionsowner
Single (Sole) ProprietorshipMajor AdvantagesSimple to startBe your own bossFew government regulationsChoose own products & hoursPay taxes only once on income from companyReceive all profits
Single (Sole) ProprietorshipMajor DisadvantagesLimited financial resources (capital needed to begin)Difficulty in managementOverwhelming time commitmentLimited growthRestriction of expansion potentialFew fringe benefits
PartnershipOwnershipGeneral (all is shared)Start Up CostsShared by partnersTaxesIncome taxed only onceExampleAg. Machinery Dealership, Landscape Business
PartnershipLiabilityShared in General Partnership but not unlimited.Responsibility for DecisionsShared between partners in a general partnership
PartnershipMajor AdvantagesMore financial resourcesShared management & pooled knowledgeLonger survivalSpecial skills of partnerPay no taxes as a businessLimited government regulations
PartnershipMajor DisadvantagesDivision of profitsDisagreement among partnersDifficult to terminateDissolved when partner dies or leaves the partnershipDivided management authority
CorporationOwnershipMany peopleStart Up CostsFrom multiple sourcesTaxesBusiness is taxed (double taxation)ExamplePhillip Morris, Procter & Gamble, Kroger
CorporationLiabilityBusiness only (not personal)Responsibility for DecisionsBoard of Directors
CorporationMajor AdvantagesMore money for investmentPerpetual lifeEase of ownership changeDraw talented employeesSeparation of ownership from managementLegal entity
CorporationMajor DisadvantagesInitial costPaperworkTwo tax returns (double taxation)Difficulty of terminationPossible conflict with boardMust follow state lawsOwners have limited control
CooperativeOwnershipOwned & controlled by membersStart Up CostsBuy sharesTaxesMost are exempt (if 50% of business with members & profits returned in dividends)ExampleLand O Lakes, Sunkist
CooperativeLiabilityMembers risk only the amount they have investedLimitedResponsibility for DecisionsEach member gets one vote
CooperativeMajor AdvantagesContinues at death of shareholdersBenefits go to membersShare in direction of businessBroad capital baseSpecial tax advantageLegal entityCooperativeMajor DisadvantagesLegal formalitiesLimited control over businessExpensive to form, maintain, & dissolveFew persons may gain excessive powerLack of member participation
FranchiseOwnershipBuy Franchise name & productsStart Up CostsLarge Start Up & Franchise CostsTaxesBusiness is taxedExampleMcDonalds
FranchiseLiabilityLimitedResponsibility for DecisionsManagement (from above)
FranchiseMajor AdvantagesNationally recognized name & reputationHelp with finding a good locationManagement system with successful track recordSuccessful methods for inventory and operationsFinancial advice & assistanceTraining for owners & staff
FranchiseMajor DisadvantagesAdditional costs for marketingMonthly percentage of gross sales may go to parent companyCompetition from other franchisesRegulations: management, dcor, selling, rulesCoattail effects if other franchises fail nationwide