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MSE602 ENGINEERING INNOVATION MANAGEMENT

Published byDale Murphy Modified over 6 years ago

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Presentation on theme: "MSE602 ENGINEERING INNOVATION MANAGEMENT"— Presentation transcript:

1 MSE602 ENGINEERING INNOVATION MANAGEMENT
FORM AND FINANCING

2 LEGAL FORMS OF A BUSINESS (EXTERNAL)
Proprietorship Partnership Corporation

3 External/Legal Form KEY AREAS OF DIFFERENCE
Simplicity of operation and formation Liability for debts, taxes and other claims Federal income taxation of business profits Double taxation of profits withdrawn from business Deduction of losses by owners Taxation of dividends received on investments

4 External/Legal Form PROPRIETORSHIP
Simplicity of operation and formation Simplest Liability for debts, taxes and other claims Unlimited personal liability Federal income taxation of business profits At individual rates Double taxation of profits withdrawn from business None Deduction of losses by owners Deductible Taxation of dividends received on investments

5 External/Legal Form PARTNERSHIP
Simplicity of operation and formation General relatively simply Limited more complex Liability for debts, taxes and other claims General partners have unlimited personal liability Limited partners liable to extent of investment Federal income taxation of business profits At individual rates Double taxation of profits withdrawn from business None Deduction of losses by owners Deductible by General partners Limited partners to the extent of investment Taxation of dividends received on investments

6 External/Legal Form CORPORATION
Simplicity of operation and formation Most complex Liability for debts, taxes and other claims Stockholders not generally liable Federal income taxation of business profits At corporate rates Double taxation of profits withdrawn from business Yes Deduction of losses by owners No Taxation of dividends received on investments A portion taxable at corporate rates

7 PRODUCT LIFE CYCLE AND INVESTMENT RECOVERY

8 PRODUCT LIFE CYCLE PROFITABILITY

9 PRODUCT CONTRIBUTION OVER TIME

10 INCOME STATEMENT

11 BALANCE SHEET

12 STAGES OF BUSINESS DEVELOPMENT
START-UP GROWTH MATURITY

13 Equity Financing Personal Assets Debt Financing Personal Loans
THE START-UP STAGE Equity Financing Personal Assets Other Investors (Rare) Debt Financing Personal Loans Government Agencies (Rare)

14 Equity Financing Retained Earnings Debt Financing Suppliers
THE GROWTH STAGE Equity Financing Retained Earnings Angels Venture Capital Debt Financing Suppliers Commercial Banks Government Agencies

15 Equity Financing Retained Earnings Debt Financing Suppliers
THE MATURITY STAGE Equity Financing Retained Earnings Public Stock or Merger Debt Financing Suppliers Commercial Banks

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