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Forms of Business Ownership

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Presentation on theme: "Forms of Business Ownership"— Presentation transcript:

1 Forms of Business Ownership
Business Today Chapter 4 Forms of Business Ownership 1

2 How to Categorize Companies by Sector
Growth of the Service Sector Factors in Service Sector Growth Increase demand for service Demographic changes Number & complexity of goods increasing Complex global economy Technology Service businesses Goods-producing businesses Prentice Hall 2 2

3 How to Categorize Companies by Sector
Growth of the Service Sector Service Sector Segments Retailing & wholesaling Finance & insurance Transportation & utilities Other services Capital-intensive businesses Labor-intensive businesses Barriers to entry Prentice Hall 3 3

4 How to Categorize Companies by Sector
Production’s Revival Manufacturing Construction Mining Agriculture Commodity business Prentice Hall 4 4

5 Categorizing Companies
Sole Proprietorship Advantages Ease of establishment Work for yourself Make your own decisions (hours) Keep all the profits Privacy Prentice Hall 5 5

6 Categorizing Companies
Sole Proprietorship Disadvantages Limited financial resources Pay more for credit Unlimited liability Limited life Prentice Hall 6 6

7 Categorizing Companies
Partnerships Advantages Easy to form Diversity of skills brought to the business Increase the chances that the organization will endure General partnership Limited partnership Master limited partnership (MLP) Prentice Hall 7 7

8 Categorizing Companies
Partnerships Disadvantages Unlimited liability Interpersonal problems Strategic Business Partnerships Consortium Cooperatives Prentice Hall 8 8

9 Categorizing Companies
Corporations Advantages Limited Liability Liquidity Produce goods more efficiently Reach more customers Finance projects internally Shareholders Stock Prentice Hall 9 9

10 Categorizing Companies
Corporations Disadvantages Required to follow certain government rules Required to publish finance & operations information Corporate profits are taxed twice Prentice Hall 10 10

11 Categorizing Companies
Corporations Types of Public Corporations Government-owned corporations Quasi-government corporations Prentice Hall 11 11

12 Categorizing Companies
Corporations Types of Private Corporations Open corporation Closed corporation S corporation Limited liability companies Subsidiary corporations Holding companies Publicly traded Not publicly traded Prentice Hall 12 12

13 Categorizing Companies
Corporate Structure and Governance Shareholders Board of Directors Officers CEO Prentice Hall 13 13

14 Mergers & Acquisitions
Types of Mergers Horizontal Merger Vertical Merger Conglomerate Merger How Mergers Occur Hostile Takeover Merger Acquisition Divestiture Trusts Tender offer Proxy fight Prentice Hall 14 14

15 Mergers & Acquisitions
Current Trends The Debate Merger & Acquisition Defenses Poison Pill Shark Repellent Golden Parachute White Knight Prentice Hall 15 15

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