Business Organizations

Sole ProprietorshipPartnershipCorporation Characteristics (2-3) Advantages (2-3) Disadvantages (2-3) Read pgs and complete the following chart: :

Sole Proprietorships Keep all profits Easy to manage “Be your own boss” Easy to start / end No special taxes AdvantagesDisadvantages Difficult to raise capital Unlimited Liability Inefficient Don’t attract the best employees

Partnerships Limited Liability (L.P.) Shared losses Easier to manage No special taxes Easier to raise capital More efficient AdvantagesDisadvantages Unlimited Liability (G.P.) Share profits Potential for owner disagreement More difficult to start Limited Life

Corporations Easy to raise capital Limited Liability Share losses Economies of scale Attract best workers Unlimited Life Easy to Transfer Ownership Can issue bonds AdvantagesDisadvantages Share profits Difficult to start Little say in day-to- day operations Corporate income tax – Double Taxation Government regulation

Corporate Structure

Public Corporations

Private Corporations

Why “Go Public?” Corporation: WWECorporation: WWE Date Went Public: Oct 19, 1999Date Went Public: Oct 19, 1999 Shares Offered (mil.): 10.00Shares Offered (mil.): IPO Price: $17.00 per shareIPO Price: $17.00 per share Offering Amount (mil.): $170.00Offering Amount (mil.): $ Why “Go Public?”

Hybrid Organizations Limited Liability Corporation or Limited Liability Company LLCLLP Limited Liability Partnership Advantages and disadvantages vary, depending on the law of the state in which and LLP or LLC operates.

Homework Read pgs Complete pg. 77 #2,3,5,6

Business Expansion Mergers Conglomerates Multinationals

Mergers Horizontal Merger –Firms in the same industry Vertical Merger –Firms in the same supply chain Conglomerate Merger –Firms in many different markets under one company umbrella

Horizontal Merger How does the government decide if it will allow a merger? Does it reduce competition in a way that will hurt consumers?

Horizontal Merger

Banking Mergers:

Vertical Merger

Who is the King of the Vertical Merger in America?

Conglomerates Companies that operate four or more distinct businesses, none of which constitutes more than 50% of their total revenue. Translation: Companies that do lots of different “stuff”

Conglomerates

Multi-Nationals Companies that operate in more than one nation.

Homework Read Pgs Complete pg. 83 #4-7

Cooperatives Consumer Cooperatives Service Cooperatives Producer Cooperatives

Consumer Cooperatives Well, sort of…

Service Cooperatives

Producer Cooperatives What do you notice about these products?

Non-Profit Organizations A Non-Profit Organization (NPO) has no owners who receive profits if the revenues of the business exceed its costs. NPOs are legally constituted and their goals typically center on activities of public or private interest without any commercial or monetary profit purposes. NPOs are active in a wide range of areas, including the public service, charity, philanthropy, education, and religion.

Non-Profit Organizations Does anyone make money working for a non-profit?

Labor Unions Groups of people who work in the same industry (or for the same company) who come together to achieve some common goal(s). Better Pay Better Working Conditions Job Security

Labor Unions Are labor unions good or bad for the economy?

Professional Associations Groups of people who work in the same profession (usually “white collar” jobs) that come together to promote the public perception of their profession

Professional Associations Why might someone join a professional association?

Business Associations Business Association – a group of unrelated businesses that comes together to help its members market their products.

The Government Protector Regulator Consumer Producer Provider