1. Business Types of ownership

2. Type of Ownership General Funeral Service 78 %Proprietorship22 % 8 %Partnership 5 % 8 %Partnership 5 % 14 %Corporation73 % ??LLC?? $ Sales in the US economy 87 % bycorporations

3. Who Owns? Proprietorship one person Partnership 2 or more partners Corporation Stockholders LLC Members

4. Ownership issues in FS Multi-unit operation Multi-unit operation Conglomerate Conglomerate Consolidator Consolidator Merger Merger Acquisition Acquisition Funeral home / cemetery combination Funeral home / cemetery combination

5. Corporations in FS Closely held94 % Public 6 % Family operated85 %

6. Franchise Is McFuneral or Funeral King the future? What about Funerals – R – Us?

7. NJ Approx 700 FH Approx 700 FH “ “ 1685 licensees “ “ 1685 licensees (140 interns) FH ownership in NJ? 34% multi – firm (unit) operation

8. NJ multi-firm operations Ocean Co.63% Ocean Co.63% Burlington Co.51% Burlington Co.51% Warren Co.18% Warren Co.18% Gloucester 23% Gloucester 23% Bergen25% Bergen25%

9. Dual Operation 2 or more funeral businesses operate from the same physical location. 2 or more funeral businesses operate from the same physical location. (A type of multi-unit operation) Requirements???? Requirements???? NJ says – max 3 (and still called dual) NJ says – max 3 (and still called dual)

10. CORPORATION TERMINOLOGY PUBLIC PUBLIC CLOSELY HELD CLOSELY HELD DOMESTIC DOMESTIC FOREIGN FOREIGN ALIEN ALIEN Sub ‘S’ Sub ‘S’

11. Public v. Closely held PUBLIC - outstanding stock held by large number of people CLOSELY HELD - limited number of stockholders.

12. DOMESTIC Corporation organized & principle operations in state in which it is chartered

13. FOREIGN Corporation chartered in state different from which it operates

14. ALIEN Corporation organized in another nation or country

15. Sub S Corporation: creation of IRS, not corporate law creation of IRS, not corporate law profits taxed as partnership profits taxed as partnership

16. Requirements: Limited # of stockholders (100) Limited # of stockholders (100) only 1 class of stock only 1 class of stock no nonresident alien stockholders no nonresident alien stockholders limitations for partnerships, corporations, trust as stockholders limitations for partnerships, corporations, trust as stockholders cannot be subsidiary cannot be subsidiary cannot be foreign corporation cannot be foreign corporation

17. Partnership terminology ACTIVE ACTIVE aka GENERAL LIMITED LIMITED SILENT SILENT SECRET SECRET DORMANT DORMANT

18. Partnership Agreement To define Purpose of partnership Purpose of partnership Obligations of partners Obligations of partners Sharing of profits/losses Sharing of profits/losses Dissolution / dispute resolution Dissolution / dispute resolution

19. ACTIVE PARTNER aka GENERAL PARTNER aka GENERAL PARTNER must be at least 1 with unlimited liability must be at least 1 with unlimited liability RESPONSIBLE FOR OPERATIONS RESPONSIBLE FOR OPERATIONS

20. LIMITED PARTNER PERSONAL LIABILITY LIMITED TO VALUE OF INVESTMENT (unlike general partner) PERSONAL LIABILITY LIMITED TO VALUE OF INVESTMENT (unlike general partner)

21. SILENT PARTNER INACTIVE INACTIVE Typically WITH FINANCIAL INTEREST only Typically WITH FINANCIAL INTEREST only but USUALLY KNOWN TO BE INVOLVED (i.e. identified) but USUALLY KNOWN TO BE INVOLVED (i.e. identified)

22. SECRET PARTNER AN ACTIVE PARTNER WHO MAY NOT BE READILY IDENTIFIABLE AS A PARTNER AN ACTIVE PARTNER WHO MAY NOT BE READILY IDENTIFIABLE AS A PARTNER

23. DORMANT PARTNER SILENT PARTNER SILENT PARTNER NOT GENERALLY KNOWN TO BE INVOLVED NOT GENERALLY KNOWN TO BE INVOLVED

24. Business Numbers W-2 W-2 1099 1099 W-4 W-4 Tax Identification # Tax Identification # I-9 I-9 K-1 K-1

25. LLC ???

26. LLC – Limited Liability Co. newest & most dynamic a form of doing business in world newest & most dynamic a form of doing business in world Best of both worlds corporation & partnership corporation & partnership

27. LLC's must not have more than 2 of the 4 characteristics that define corporations: limited liability to the extent of assets limited liability to the extent of assets continuity of life continuity of life centralization of management centralization of management free transferability of ownership interests. free transferability of ownership interests.

28. Disadvantages?? must have limited life must have limited life not to exceed 30 years. no well developed body of case law or IRS rulings no well developed body of case law or IRS rulings

29. Fees - examples New Jersey Proprietorship - none Proprietorship - none Partnership – none Partnership – none LLC - annual registration fee $50 LLC - annual registration fee $50 Corporation – starts @ $500 (and goes up quickly) Corporation – starts @ $500 (and goes up quickly)

30. NJ Taxes Proprietorship – as personal income Proprietorship – as personal income Partnership – as personal income Partnership – as personal income except IF more than 2 partners, then $150/partner Corporation – corporate tax + personal income tax Corporation – corporate tax + personal income tax LLC – taxed as partnership, unless elect to be taxed as corporation (Duhhh!) LLC – taxed as partnership, unless elect to be taxed as corporation (Duhhh!)