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Chapter 4 Forms of Business Ownership Business Today.

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Presentation on theme: "Chapter 4 Forms of Business Ownership Business Today."— Presentation transcript:

1 Chapter 4 Forms of Business Ownership Business Today

2 2Prentice Hall 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

3 3Prentice Hall 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

4 4Prentice Hall How to Categorize Companies by Sector Productions Revival – Manufacturing – Construction – Mining – Agriculture Commodity business

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

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

7 7Prentice Hall 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)

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

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

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

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

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

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

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

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


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