Understanding business 10th chapter 5 how to form a business

Partnerships

OTHERS FORMS OF PARTNERSHIPS

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Master Limited Partnership (MLP) - Consists of having a general partner who is responsible
for running the partnership, and having individual investors who are limited partners. Looks much
like a corporation, but is taxed like a partnership and thus avoids the corporate income tax.

•

Limited Liability Partnership (LLP) - Domestic LLPs may be managed by one or more managers
or one or more members. Members are only responsible for losses, up to the amount they invest and
those they supervise. A California LLP generally offers liability protection similar to that of a
corporation but is taxed based on the number of members.

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Advantages of
Corporations

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HOW OWNERS AFFECT
MANAGEMENT
Owners / Stockholders
(select Board of Directors)

Board of Directors
(hire Officers)

Officers
(set corporate
objectives and
select managers)
Managers (supervise employees)

Employees

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Advantages of
Corporations

The BIG BOYS of BUSINESS

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1) Walmart
2) Kroger
3) Walgreens
4) Home Depot
5) Target

About.Com - Retail Industry - 2013

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Advantages of

PRIVACY PLEASE

Corporations

The 10 Largest Private Corporations in the U.S.

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COMPANY

STATE

INDUSTRY

Cargill

MN

Farming

Koch Industries

KS

Chemicals

Bechtel

CA

Construction

Mars

VA

Food, Drink & Tobacco

PricewaterhouseCoopers

NY

Business Services & Supplies

Pilot Flying J

TN

Convenience Stores & Gas

Publix Super Marts

FL

Food Markets

Love’s Travel Stops & Country Stores

OK

Convenience Stores & Gas

Ernst & Young

NY

Business Services & Supplies

Reyes Holding

IL

Food, Drink & Tobacco

www.forbes.com 2014

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Advantages of
Corporations

EVEN the BIG GUYS MAKE MISTAKES

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COMPANY

BAD MOVE

Apple Maps

Launched in September 2013, was a disaster, giving terrible directions, missing railway stations, and Dublin Ireland was given a new
airport.

Atari

Amount of Surplus from a bad game was so big, that it had to be buried in a New Mexican landfill.

Blockbuster

Passed on a partnership with Netflix, and went bankrupt.

Hostess

CEO cuts everyone’s salary, but his own, and goes bankrupt.

Coca Cola

New Coca only lasted 77 days due to 1500 complaint calls a day.

Shoebox Cards

Stuff like, don't mention breasts on cards for 13-year-old girls. And don't imply that big breasts will get you diamonds from rich
boyfriends.

Denny’s Obamacare
Surcharge

John Metz, a 40-store manager, promised to add a 5% surcharge to customer bills to help pay for Obamacare. He even suggested
customers reduce tips to their servers in order to pay surcharge. 
This created a mess for Denny's and Metz. Customer backlash was intense, and other franchisees not involved with issue reported
sales drop. Metz apologized regretting his statement after being spoken with by Denny’s CEO.

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