Business Ownership

Chapter 8 Section 1

Types of Ownership

Do you or anyone you know own a company?

What kind of company is it?

Types of ownership

Sole proprietorship Partnership Corporations Subchapter S corporations Limited Liability companies (LLC) Multinational corporations

Sole Proprietorship

A type of business ownership in which one person owns the business. Examples:

Dairyhaus ???

Sole Proprietorship

Advantages: You are your own boss Limited paperwork/regulations You get profits

Disadvantages: Unlimited liability Limited capital Governments differ Global competition

Partnership

A type of business in which two or more people own the business. Examples:

Law firms Doctors offices ???

Partnership

Advantages: Partners bring different skills More capital

Disadvantages: Breaking up is hard to do Partners are fully liable Partnerships overseas are difficult

Corporations

A type of business ownership in which many people, whom the law treats as one person, own the business.

Corporations

Closely held: private corporation in which shares are owned by a small group. Example: banks

Publicly held: corporation in which shares are sold openly in stock markets. Microsoft

Corporations

Characteristics: Board of directors/officers Stockholders elect board Stockholders make money

Dividends: a % of the profit Increase stock value

Corporations

Advantages: Limited liability Business continues to exist no matter who owns

stock Disadvantages:

Costly to start up Paperwork Takeover possibilities Double taxation

Subchapter S corporations

A corporation that is taxed like a partnership

The business owners pay taxes from personal earnings. Examples:

restaurants

Limited Liability Company

A company whose managers and owners enjoy limited liability and some tax benefits

Multinational Corporations

An organization that operates in more than one country. MNC’s aka: global, transnational or worldwide companies or corporations Examples:

McDonalds Burger King

MNC’s

The original place of business for a company is the home country

When the company builds operations in another country it becomes an MNC

The foreign country is the host country Larger role in the world economy than

simply an exporter

MNC’s continued

Successful MNC’s Create universal products Design HR policies to include global

workers Good guests in all countries Economic and political power

Citations

Donald Baack, Ph.D., International Business. The McGraw-Hill Companies, Woodland Hills, California, 2008

Lindenmuth, Janet. Law Library Books. Digital image. Flickr. Yahoo, 12 Jan. 2012. Web. 25 June 2012. <http://www.flickr.com/photos/j3net/6685194971/>.

401K 2012. Tax. Digital image. Flickr. Yahoo, 9 Nov. 2010. Web. 25 June 2012. <http://www.flickr.com/photos/68751915@N05/6355404323/>.

Microsoft Office Clip Art