Business Organizations

1. Business Organizations Business Organizations

2. Sole Proprietorships Advantages Disadvantages • Keep all profits • Easy to manage • “Be your own boss” • Easy to start / end • No special taxes • Difficult to raise capital • Unlimited Liability • Inefficient • Don’t attract the best employees

3. Partnerships Advantages Disadvantages • Limited Liability (L.P.) • Shared losses • Easier to manage • No special taxes • Easier to raise capital • More efficient • Unlimited Liability (G.P.) • Share profits • Potential for owner disagreement • More difficult to start • Limited Life

4. Public Corporations

5. Private Corporations

6. Corporate Structure

7. Why “Go Public?” Why “Go Public?” • Corporation: WWE • Date Went Public:   Oct 19, 1999 • Shares Offered (mil.):   10.00 • IPO Price: $17.00 per share • Offering Amount (mil.):   $170.00

8. Corporations Advantages Disadvantages • Easy to raise capital • Limited Liability • Share losses • Economies of scale • Attract best workers • Unlimited Life • Easy to Transfer Ownership • Can issue bonds • Share profits • Difficult to start • Little say in day-to-day operations • Corporate income tax – Double Taxation • Government regulation

9. Hybrid Organizations LLC LLP • Limited Liability Corporation or Limited Liability Company • Limited Liability Partnership Advantages and disadvantages vary, depending on the law of the state in which and LLP or LLC operates.

10. Cooperatives • Consumer Cooperatives • Service Cooperatives • Producer Cooperatives

11. Well, sort of… Consumer Cooperatives

12. Service Cooperatives

13. Producer Cooperatives

14. Non-Profit Organizations • A Non-Profit Organization (NPO) has no owners who receive profits if the revenues of the business exceed its costs. • NPOs are legally constituted and their goals typically center on activities of public or private interest without any commercial or monetary profit purposes. • NPOs are active in a wide range of areas, including the public service, charity, philanthropy, education, and religion.

15. Non-Profit Organizations

16. Labor Unions Groups of people who work in the same industry (or for the same company) who come together to achieve some common goal(s). Better Pay Better Working Conditions Job Security

17. Labor Unions

18. Professional Associations Groups of people who work in the same profession (usually “white collar” jobs) that come together to promote the public perception of their profession

19. Professional Associations

20. Business Associations Business Association – a group of unrelated businesses that comes together to help its members market their products.

21. Business Expansion • Mergers • Conglomerates • Multinationals

22. Mergers • Horizontal Merger • Vertical Merger • Conglomerate Merger

23. Horizontal Merger

24. Horizontal Merger

25. Horizontal Merger

26. Banking Mergers: 2007-2008

27. Vertical Merger

28. Who is the King of the Vertical Merger in America?

29. Conglomerates • Companies that operate four or more distinct businesses, none of which constitutes more than 50% of their total revenue. • Translation: Companies that do lots of different “stuff”

30. Conglomerates

31. Multi-Nationals • Companies that operate in more than one nation.

32. The Government • Protector • Regulator • Consumer • Producer • Provider