1、Chapter 1Forms of Business Ownership第1頁Forms of Business OwnershipLecture Outline Sole Proprietorships 個人企業 Partnerships 合作制企業 Corporations 企業 Joint Ventures 合資企業 Limited Liability Companies 有限責任企業 Mergers & Acquisitions 企業吞并與收購 Franchises 特許經營第2頁Forms of Business OwnershipLead-in activitiesHow many

2、 Chinese and foreign companies can you name? Do you know what forms of business ownership they are?What is your most admired corporation? What company do you wish to work for? Why?第3頁Forms of Business OwnershipLead-in activitiesSample:第4頁Forms of Business OwnershipLead-in activitiesSample:第5頁Forms o

3、f Business OwnershipAdditional activitiesDo you know the symbols of the following companies and their forms of business ownership? 第6頁Forms of Business OwnershipSole Proprietorship An organization that is owned, and usually managed, by one person is called a sole proprietorship. A sole proprietorshi

4、p is the oldest and most common type of business. Examples: a virtual assistant working from her/his home, a woodworker selling at craft fairs and a freelance consultant offering his services to local businesses.第7頁Forms of Business OwnershipSole Proprietorship Advantages Owner in direct control (yo

5、u are your own boss). Keeping the profits from the business The easiest form of business to start No double taxationDOUBLE TAXATIONThe imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sale

6、s taxes)第8頁Forms of Business OwnershipSole Proprietorship Disadvantages Total (unlimited) personal liability. Limited financial resources (capital). Lack of continuity as a result of disability or death of owner. Owner may have limited managerial expertise. 第9頁Forms of Business Ownership1 Why is the

7、 sole proprietorship one of the most popular forms of business ownership? Why would unlimited liability be considered as one of the biggest drawbacks to sole proprietorshipsSole Proprietorship Questions for discussion第10頁Forms of Business OwnershipPartnerships A partnership is a legal relationship b

8、etween persons carrying on a profit-motivated businessEach person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.第11頁Forms of Business OwnershipPartnerships Three key elements common ownership shared profits and losses the right to partici

9、pate in managing the operations of business 第12頁Forms of Business OwnershipPartnerships Two types of partnerships General partnership Limited partnership 第13頁Forms of Business OwnershipPartnerships: General Partnership Advantages Simple organization. Additional personal resources (financial and mana

10、gerial). The right to select partners. Low start-up (organizational) costs. Limited outside regulation. No double taxation. 第14頁Forms of Business OwnershipPartnerships: General Partnership Disadvantages Unlimited liability for partnership obligations. Lack of continuity in event of death or disabili

11、ty of one partner. Sharing of profits. All profits are taxed as personal income. Difficult to raise additional capital. Hard to find suitable partners. Divided authority (limited decision making). 第15頁Forms of Business OwnershipPartnerships: Limited Partnership Advantages General partner maintains c

12、ontrol of the business. Limited partner can invest with a limit on personal liability. Easy way to secure capital. Business not taxed directly. 第16頁Forms of Business Ownership1Partnerships: Limited Partnership Disadvantages More complex to organize. Limited partner has no control over the business.

13、General partner has unlimited personal liability for the obligations of the business. Lack of continuity in event of death or disability of the general partner. 第17頁Forms of Business OwnershipPartnerships: Limited Partnership Disadvantages More complex to organize. Limited partner has no control ove

14、r the business. General partner has unlimited personal liability for the obligations of the business. Lack of continuity in event of death or disability of the general partner. 第18頁Forms of Business OwnershipPartnerships Questions for discussion What are the differences between a limited partner and

15、 a general partner? How would you decide whether to team up with someone in a partnership form of business?第19頁Corporations It is empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.The corpora

16、tion is a legal entity, allowed by legislation, which permits a group of people, as shareholders (for-profit companies) or members (non-profit companies), to create an organization, which can then focus on pursuing set objectives.第20頁Corporations Types of CorporationType Description Private Attempts

17、 to earn a satisfactory profit.Public Owned and run by the government.Closed Stock held by only a few owners and not actively sold on the stock market.OpenStock held by numerous people and actively sold on the stock market.Municipal Cities and townships that carry out business.Domestic Incorporated

18、in one province or country and doing business within that province or country.第21頁Corporations Types of CorporationType Description Foreign Incorporated in one province or country and doing business in another province or country.Alien Incorporated in one nation and operation in another nation.Nonpr

19、ofit Service organization incorporated for limited-liability status.第22頁Corporations AdvantagesLimited personal liability: means that the owners of a business are responsible for losses only up to the amount they invest Skilled management team: Professional managers are trained and experienced caree

20、r executives. 第23頁Corporations AdvantagesTransfer ownership: Shareholders have the right to sell their shares of a corporations stock to whomever they pleaseGreater capital base: The corporate form of business makes it easier for a business to grow and expand. Through the issuance of shares, corpora

21、tions may be able to access the money they will need for expansion.Stability: A Corporation has an unlimited life.第24頁Corporations a sole proprietorship or partnership: if an owner should die, all of his business assets may require probate in order to be passed on to his or her heirs or devisees. co

22、rporation or Limited Liability Companies (LLC): shares of stock (or membership interests in the LLC) can be issued to family members or other owners to clearly delineate their ownership interests in the business. Additional InfoTransfer of business interests to succeeding generations:第25頁Corporation

23、s DisadvantagesDouble taxation: The corporation has to pay taxes on its profits. The shareholders must also pay income tax on the dividends they receive through ownership.the imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or fi

24、nancial transaction (in the case of sales taxes). Additional InfoDouble taxation第26頁Corporations Disadvantages Government involvement: Provincial and state Governments have the right by law to exercise certain controls on, and to require corporations to maintain proper corporate records. Lack of sec

25、recy: A corporation must provide each shareholder with an annual report. The reports present data on sales volume, profit, total assets, and other financial matters.第27頁Corporations Disadvantages Lack of personal interest: In most corporations, management and ownership are separate. This separation

26、can result in a lack of personal interest in the success of the corporation. Credit limitations: If a corporation fails, its creditors can look only to the assets of the business to satisfy claims. 第28頁Corporations Disadvantages Lack of personal interest: In most corporations, management and ownersh

27、ip are separate. This separation can result in a lack of personal interest in the success of the corporation. Credit limitations: If a corporation fails, its creditors can look only to the assets of the business to satisfy claims. 第29頁Corporations Corporations: have an easier time obtaining financin

28、g than a sole proprietorship; have several people making management decisions, and the entity continues in the event of illness or the death of one of the partners;can raise money through stock offerings. Additional InfoDifferences With Sole Proprietorships:第30頁Corporations Sole proprietorship:a len

29、der is entirely dependent on the business owners ability to repay the loan with his own labor. cant sell stock to raise funds for equipment or expansion. Additional InfoDifferences With Sole Proprietorships:第31頁Corporations Whats the difference between an open and a closed corporation?Why do most yo

30、ung people prefer to work for a large corporation?Questions for Discussion:第32頁Joint Ventures A joint venture (JV) is the pooling of resources and expertise by two or more businesses, typically from different areas or countries to achieve a particular goal. The risks and rewards of the enterprise ar

31、e also shared. Partnerships occur when two or more entities decide to work together in a business. 第33頁Joint Ventures business expansion development of new products moving into new markets, particularly overseas.Reasons behind the formation of a joint venture:第34頁Joint Ventures access to new markets

32、 and distribution networks; increased capacity; the sharing of risks with a partner; access to specialized staff and technology. Advantages:第35頁Joint Ventures If the objectives of the venture are not 100 per cent clear, or not communicated to all the staff involved, problems are likely to arise. The

33、re is an imbalance in levels of expertise, investment, or assets brought into the venture by the different partners. Disadvantages:第36頁Joint Ventures Different cultures and management styles result in poor integration and cooperation between the partners. The parent businesses dont provide sufficien

34、t leadership and support in the early stages. Disadvantages:第37頁Joint Ventures Additional Info第38頁Joint Ventures Additional Info第39頁Joint Ventures Additional Info第40頁Joint Ventures What ownership is a joint venture similar to? Why?What are the advantages of a joint venture?Questions for Discussion:第

35、41頁Limited Liability Companies A Limited Liability Company (LLC) is a type of business ownership combining several features of corporation and partnership structures.It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a pa

36、rtnership. Its formation is more complex and formal than that of a general partnership.第42頁Limited Liability Companies Like a corporation, the owners (called members) of the LLC are not personally responsible for the debts of the LLC. Like a partnership, there is no dual taxation and the earnings of

37、 the business are taxed directly to the members.第43頁Limited Liability Companies AdvantagesLimited liability: Members cannot be held personally liable for debts unless they have signed a personal guarantee. Flexible profit distribution: Limited liability companies can select varying forms of distribu

38、tion of profits. 第44頁Limited Liability Companies AdvantagesNo minutes: The LLC business structure requires no corporate minutes or resolutions and is easier to operate. No double taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid t

39、he double taxation of paying corporate tax and individual tax. 第45頁Limited Liability Companies DisadvantagesLimited liability: a LLC is dissolved when a member dies or undergoes bankruptcy.Going public: it is hard to go public.Added complexity: A LLC may be classified as a sole-proprietorship, partn

40、ership, or corporation for tax purposes. Classification can be selected or a default (違約) may apply.第46頁Limited Liability Companies Additional Info有限責任企業是依據美國五十個州中某一州法律而設置非法人商業實體。通常必須有兩個或兩個以上全部者，稱為“組員”；但在一些州，如加利福尼亞州、特拉華州和紐約州，也允許一人設置有限責任企業。有限責任企業組員能夠是個人或實體，美國人或外國人皆可。有限責任企業組員人數并無上限要求。第47頁Limited Liabi

41、lity Companies Additional Info有限責任企業是美國各州法律要求一個比較新企業模式，在很短時間內就成為了一個大受歡迎全部權形式。它產生滿足了商人們需要、即提供了一個含有（1）有限責任（企業也具備有限責任特征，但合作并不具備條件）和（2）合作型運行靈活性法律實體。有限責任企業價值還表達在：不論組員對管理參加程度怎樣，全部組員只以其出資額為限負擔責任。實際上，有限責任企業是企業和合作嫁接產物。第48頁Limited Liability Companies Additional Info 現行中國企業法要求企業分為有限責任企業和股份有限企業。從西方企業理論看，企業依據不一樣

42、條件可做各種分類。比如依據是否適用有限責任分為有限責任企業和無限責任企業。有限責任企業最顯著特征是，股東以其出資額為限對企業負擔責任，企業以其全部資產對企業債務負擔全部責任，不能公開募股。股份有限企業區分于有限責任企業最為主要特征是：其全部資本分為等額股份，股東以其所持有股份對企業負擔責任，企業以其全部資本對企業債務負擔責任，比如上市企業。第49頁Limited Liability Companies Additional InfoA limited liability company could be converted into a company limited by shares. 第

43、50頁Limited Liability Companies Additional InfoNote: 中美企業名稱有時沒法一一對應翻譯，因為兩國之間企業法對企業定義不一樣，比如中國“股份有限企業”就無法對應英文。 美國企業名稱通常為： Xxx company Xxx Co, Ltd (corporation limited) Xxx Inc. (Incorporated)第51頁Mergers & AcquisitionsThe phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporat

44、e strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.第52頁Mergers & AcquisitionsA Merger is the result of th

45、e combination of two companies (or corporations) to form a new company.An Acquisition is one company buying the property and obligations of another company.第53頁Mergers & AcquisitionsWhen one company takes over another and clearly established itself as the new owner, the purchase is called an acquisi

46、tion. From a legal point of view, the target company ceases to exist, the buyer swallows the business and the buyers stock continues to be traded.第54頁Mergers & AcquisitionsIn the pure sense of the term, a merger happens when two firms, often of about the same size, agree to go forward as a single ne

47、w company rather than remain separately owned and operated. This kind of action is more precisely referred to as a merger of equals. Both companies stocks are surrendered and new company stock is issued in its place. E.g Both Daimler-Benz and Chrysler ceased to exist when the two firms merged, and a

48、 new company, DaimlerChrysler, was created.第55頁Types of corporate mergersA horizontal merger joins firms in the same industry and allows them to diversify or expand their products. In a horizontal merger, the acquisition of a competitor could increase market share.第56頁Types of corporate mergersA ver

49、tical merger is the joining of two firms involved in different stages of related businessesa manufacturer merging with a supplier of component products, or a manufacturer merging with a distributor of its products.第57頁Types of corporate mergersA conglomerate merger unites firms in completely unrelat

50、ed industries. The primary purpose of a conglomerate merger is to diversify business operations and investments.第58頁Types of corporate mergersAdditional InfoProcess: 第59頁Types of corporate mergersAdditional Info第60頁Types of corporate mergersAdditional Info第61頁Types of corporate mergersQuestions for

51、Discussion: What is the difference between mergers and acquisitions?Give more examples to explain horizontal mergers, vertical mergers and conglomerate mergers.第62頁FranchisingA franchise is the right to use a business name and sell products or services, usually in a specific geographical territory.F

52、ranchising is the practice of using another firms successful business model. The word franchise is of Anglo-French derivation - from franc - meaning free, and is used both as a noun and as a (transitive) verb.第63頁FranchisingFor the franchisor, the franchise is an alternative to building chain stores

53、 to distribute goods that avoids the investments and liability of a chain. The franchisors success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.第64頁FranchisingThe following U.

54、S. listing tabulates the early ranking of major franchises along with the number of sub-franchisees (or partners) from data available for . As can be seen from the names of the franchises, the USA is a leader in franchising, a position it has held since the 1930s when it used the approach for fast-f

55、ood restaurants, food inns and, slightly later, motels at the time of the Great Depression. Additional Info第65頁FranchisingAs of , there were 909,253 established franchised businesses, generating $880.9 billion of output and accounting for 8.1 percent of all private, non-farm jobs. This amounts to 11

56、 million jobs, and 4.4 percent of all private sector output.Additional Info第66頁Franchising1. McDonalds startup costs in , $995,900 $1,842,700 (37,300 partners in ) 2. 7-Eleven Inc. (convenience stores) |startup costs in $40,500- $775,300, (28,200 partners in ) 3. Hampton Inns & Suites (midprice hote

57、ls) |startup costs in $3,716,000 $15,148,800 5. 4.Great Clips (hair salons) | startup costs in $109,000 - $203,000Additional Info第67頁Franchising5. Jani-King (commercial cleaning) | startup costs $11,400 - $35,050, (11,000 partners worldwide in ) 6. Servpro (insurance and disaster restoration and cleaning) | startup costs in $102,2