MCE part 3

Franchisor

a company that develops a product concepts and sells others the rights to make and sell the products

Horizontal merger

joining of two firms in the same industry

Partnership

legal form of business with two or more owners

Cooperative

•A business owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain •Serve one billion members worldwide •Members democratically control the business by electing a board of directors that hires professional management

double taxation

•must file and pay taxes on corporate level and individual level

(Consumer market)

•people with unsatisfied wants and needs who have both the resources and willingness to buy

(Angels)

•private individuals who invest their own money in potentially hot new companies before they go public

Vertical merger

•the joining of two companies involved in different stages of related business

C corporation

A state-chartered legal entity with authority to act and have liability separate from its owners

S corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships

General partnership/partner

All owners share in operating the business and in assuming liability for the business's debts. General partner is an owner (partner) who has unlimited liability and is active in managing the firm

(Operations)

Deciding on logistics Manufacturing plan •Plant size •Machinery required •Production capacity Supply chain considerations •Inventory and inventory control-methods •Location of plants and distributors, etc. •Transportation costs

Limited partnership/partner

Includes one or more general partners and one or more limited partners. Limited partner is an owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.

(Accounting)

Keeping records. •Daily sales, expenses, and profits •Inventory control, customer records, and payroll Helps with: •Tax planning and financial forecasting •Choosing sources of financing and wiring requests for funds • Poor accounting practices lead to costly mistakes

Limited liability

Limited liability: responsibility of a business's owners for losses only up to the amount they invest

(Human resources)

Managing your employees •Deciding labor needs •Recruiting and selecting the right people •Training and development for growth •Rewards and culture for retention •Motivating for performance

(SBA-Small Business Administration)

US government agency that advises and assists small businesses by providing management, financial advice, and loans

(Crowfunding)

donation based or debt-investment (peer-to-peer lending)

Flow through entity

income is passed straight to its shareholders or owners

(Venture capitalists)

individuals or companies that invest in new business in exchange for partial ownership of those businesses

Conglomerate merger

joining of firms in completely unrelated industries

acquisition

one company's purchase of the property and obligations of another company

Franchisee

person who buys a franchise

Limited liability company (LLC)

responsibility of a business's owners for losses only up to the amount they invest. •Like S Corp, but without the special eligibility requirements •Owner(s) can be a person, partnership, or corporation •Owners are not personally liable •Pay self-employment tax •Pay personal tax or corporate tax •LLC ownership is not transferable (no stock)

Unlimited liability

responsibility of business owners for all debts of the business

Corporation

•Legal entity that is separate and distinct from its owners •"artificial being" - entity that exists only in the eyes of the law •Shareholders have rights to profits (dividends or appreciation of stock) but are not held personally liable for company's debts

(Planning)

•Mission, Vision, and Values •Strategic and financial objectives

Sole Proprietorship

•Owned, and usually managed, by one person •Owner manages all areas of the business •Usually, fewer benefits and lower wages for employees •Most common form of business

Franchise

•The right to use a specific business's name and sell its products or services in a given territory

(Financing)

•You need money to start a business! •Potential sources of capital: •Personal, family, or business associates Banks and finance institutions (lenders

Franchise agreement

•arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory