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meet 13 (3).pptx
- 1. Meet 13 Choosing aForm of Business Ownership Compiled by: Lecturer Team for Introduction to Management and Business Courses Year 2020/2021
- 2. Learning objectives: • M9-Mahasiswa mampu menganalisis perkembangan bisnis dari kepemilikan berdasarkan survey di lapangan (Pusat Perbelanjaan/mall)
- 3. Sole Proprietorships • Abusiness that is owned (and usually operated) by one person • The simplest form of business ownership and the easiest to start • Many large businesses began as small, struggling sole proprietorships • The most popular form of business ownership
- 4. Advantages and Disadvantagesof Sole Proprietorships ADVANTAGES • Ease of start-up and closure • Pride of ownership • Retention of all profits • No special taxes • Flexibility of being your own boss DISADVANTAGES – Unlimited liability • A legal concept that holds a business owner personally responsible for all the debts of the business – Lack of continuity – Lack of money – Limited management skills – Difficulty in hiring employees
- 5. Partnerships • A voluntaryassociation of two or more persons to act as co- owners of a business for profit • Less common form of ownership than sole proprietorship or corporation • No legal limit on the maximum number of partners; most have only two • Large accounting, law, and advertising partnerships have multiple partners • Partnerships are usually a pooling of special talents or the result of a sole proprietor taking on a partner
- 6. Advantages and Disadvantages ofPartnerships ADVANTAGES • Ease of start-up • Availability of capital and credit • Personal interest • Combined business skills and knowledge • Retention of profits • No special taxes DISADVANTAGES • Unlimited liability • Management disagreements • Lack of continuity • Frozen investment
- 7. Corporations • An artificialperson created by law with most of the legal rights of a real person, including the rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts. • Unlike a real person, however, a corporation exists only on paper. • There are approximately 6 million corporations in the U.S. • They comprise about 19% of all businesses, but they account for 83% of sales revenues.
- 8. Corporate Ownership • Corporateownership • Stock • The shares of ownership of a corporation • Stockholder • A person who owns a corporation’s stock • Closed corporation • A corporation whose stock is owned by relatively few people and is not sold to the general public • Open corporation • A corporation whose stock is bought and sold on security exchanges and can be purchased by any individual
- 9. Forming a Corporation •Incorporation • The process of forming a corporation • Most experts recommend consulting a lawyer
- 10. Forming a Corporation •Where to incorporate • Businesses can incorporate in any state they choose • Some states offer fewer restrictions, lower taxes, and other benefits to attract new firms • Domestic corporation • A corporation in the state in which it is incorporated • Foreign corporation • A corporation in any state in which it does business except the one in which it is incorporated • Alien corporation • A corporation chartered by a foreign government and conducting business in the U.S.
- 11. Forming a Corporation •The Corporate Charter • Articles of incorporation: a contract between the corporation and the state in which the state recognizes the formation of the artificial person that is the corporation and includes • firm’s name and address • incorporators’ names and addresses • purpose of the corporation • maximum amount of stock and types of stock to be issued • rights and privileges of stockholders • length of time the corporation is to exist
- 12. Forming a Corporation •Stockholders’ rights • Common stock • Stock owned by individuals or firms who may vote on corporate matters but whose claims on profit and assets are subordinate to the claims of others • Preferred stock • Stock owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common stock owners • Dividend • A distribution of earnings to the stockholders of a corporation • Proxy • A legal form listing issues to be decided at a stockholders’ meeting and enabling stockholders to transfer their voting rights to some other individual or individuals
- 13. Forming a Corporation •Organizational meeting • The last step in forming a corporation • The incorporators and original stockholders meet to adopt corporate by-laws and elect their first board of directors • Board members are directly responsible to stockholders for how they operate the firm
- 14. Corporate Structure • Boardof directors • The top governing body of a corporation, the members of which are elected by the stockholders • Responsible for setting corporate goals, developing strategic plans to meet those goals, and the firm’s overall operation • Outside directors: experienced managers or entrepreneurs from outside the corporation who have specific talents • Inside directors: top managers from within the corporation
- 15. Corporate Structure • Corporateofficers • The chairman of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board • Implement the chosen strategy and direct the work of the corporation, periodically reporting results to the board and stockholders
- 16. Hierarchy of CorporateStructure • Stockholders exercise a great deal of influence through their right to elect the board of directors.
- 17. Advantages and Disadvantagesof a Regular Corporation, S-Corporation, Limited-Liability Company
- 18. Special Types ofBusiness Ownership • Not-for-profit corporations • Corporations organized to provide social, educational, religious, or other services, rather than to earn a profit • Charities, museums, private schools, colleges, and charitable organizations are organized as not-for-profits primarily to ensure limited liability • Must meet specific IRS guidelines to obtain tax-exempt status
- 19. Joint Ventures • Jointventures • Agreements between two or more groups to form a business entity in order to achieve a specific goal or to operate for a specific period of time • Example: Walmart and India’s Bharti Enterprises
- 20. Corporate Growth • Growthfrom within • Introducing new products • Entering new markets • Growth through mergers and acquisitions • Merger: the purchase of one corporation by another; essentially the same as an acquisition • Hostile takeover: a situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger • Tender offer: an offer to purchase the stock of a firm targeted for acquisition at a price just high enough to tempt stockholders to sell their shares • Proxy fight: a technique used to gather enough stockholder votes to control a targeted company
- 21. Corporate Growth • Horizontalmergers • Mergers between firms that make and sell similar products • Subject to approval by federal agencies to protect competition • Vertical mergers • Mergers between firms that operate at different but related levels of production and marketing of a product • Usually one firm is a supplier or customer of the other • Conglomerate mergers • Mergers between firms in completely different industries
- 22. Three Types ofGrowth by Merger
- 23. Reference • William M.Pride, Robert J. Hughes, Jack R. Kapoor. (2019). Foundations of Business 6E. America: Cengage Learning
- 24.