BUS X100 1nd Edition Lecture 5 Outline of Last Lecture – Formal Business Forms I. Corporationa. definitionII. Types of Corporationsa. ‘C’ Corportationsb. ‘S’ CorporationsIII. Advantages of Corporationsa. Limited Liability for shareholdersb. ease of rasing capitalc. perpetual lifed. ease of transfer of ownershipe. specialized managementIV. Disadvantages of Corporationsa. difficulty and expense of formationb. government regulationc. lack of secrecyd. double taxationV. Forming a Corporationa. Incorporationb. Articles of Incorporation – Corporate Charterc. Stockholder’s RightsVI. Limited Liability Companya. definitionVII. Types of Limited Liability Companiesa. Single-member LLCsb. Multi-Member LLCsi. Member manages LLCsii. Manager-managed LLCsVIII. Advantages of Limited Liability Companiesa. Limited Liabilityb. Single ‘pass-thru’ taxationc. Simplified AccountingIX. Disadvantages of Limited Liability Companiesa. Cost and formality of formationb. legal uncertaintyc. variations of LLC statutes and tax laws by stateThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.X. Governing Documents Limited Liability Companiesa. Articles of Organizationb. Operating AgreementsOutline of Current Lecture – Entrepreneurship and Small BusinessI. Entrepreneurship Economya. definitionII. Small Business and Trendsa. definitionIII. Small Business Administration SBA ‘Smallness’ Guidelinesa. Service Industriesb. Distribution Industriesc. Production IndustriesIV. Pros and Cons of Small Businessesa. advantagesb. disadvantagesV. Entrepreneurshipa. definitionVI. Characteristics of a Successful Entrepreneur VII. The road to EntrepreneurshipVIII. Developing a Business Plana. characteristicsIX. Small Business Administrationa. definitionb. Financial Assistance c. Assist with Government Procurementd. Training and Consulting Assistancee. Encourage Legislation and Provide InformationX. Franchisinga. definitionCurrent LectureI. Entrepreneurship Economya. entrepreneurship is always present to some degree in an economy – the degree to which it occurs is influenced by: i. governmentii. cultural factorsiii. societal factorsiv. competitive factorsb. entrepreneurship provides the engine for an economy to engage in dynamic change and adaptionII. Small Business and Trendsa. definitioni. one that is independently owned and operated for profit – and is not dominant in its field1. not large2. high growth3. part-time small business4. importance in providing jobs5. technical innovationIII. Small Business Administration SBA ‘Smallness’ Guidelinesa. Service Industriesi. servicesb. Distribution Industriesi. retailing ii. wholesale tradec. Production Industriesi. manufacturingii. general and heavy constructioniii. special trade constructionIV. Pros and Cons of Small Businessesa. advantagesi. flexibility – ability to adapt to changeii. independence – you are your own bossiii. service – closer to the customeriv. simplified – business form and record keepingv. specializationb. disadvantagesi. risk of failure – 2 out of 3 close their doors within the first 5 yearsii. limited potential – based on technical and business skills of the owneriii. limited ability to raise capital – 67% start with less than $10,000V. Entrepreneurshipa. definitioni. an entrepreneur risks the time, effort and money – to start and operate a businessb. key issues involved are risk, creativity, innovation, and competitionc. this is the single most important set of business activities in the USVI. Characteristics of a Successful Entrepreneur a. visionb. high energy levelc. self-confidenced. optimisme. creativityf. tolerance for uncertaintyg. tolerance for failureVII. The road to Entrepreneurshipa. entrepreneurs may establish a business base on what they learn from their current employersb. many entrepreneurs worked as a consultant and the transform these experiencesinto a new businessc. growing industries, such as in the internet, computer or telecommunication industries, create opportunities for entrepreneurshipd. changes in the labor market, such as corporate downsizing, mergers, or acquisitions, leads to a surge in entrepreneurship e. in large companies, entrepreneurs may become ‘Intraprenteurs’ or ‘Change Agents’ – seeking innovation and changeVIII. Developing a Business Plana. a carefully constructed guide for the person starting the business… also serves as a concise document for potential investorsIX. Small Business Administrationa. “America’s Small business Resource” established in 1953 to ‘aid, cousel, assist, and protect the interests of small businessb. Financial Assistance i. loans via private lenders guaranteed by the SBAc. Assist with Government Procurementi. small business ‘set-aside’ programsd. Training and Consulting Assistancei. S.C.O.R.Eii. A.C.Eiii. S.B.Ie. Encourage Legislation and Provide InformationX. Franchisinga. definitioni. an agreement between a franchisor and a franchisee, to make, sell or license products, services, or concepts. Franchisee pays fees to the
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