- StudyBlue
- Colorado
- University of Colorado Boulder
- Business
- Business 1010
- Cross
- BCOR midterm 1
BCOR midterm 1
Business 1010 with Cross at University of Colorado Boulder
About this deck
By: Kenzie Walker
Created: 2011-09-21
Size: 44 flashcards
Views: 40
Created: 2011-09-21
Size: 44 flashcards
Views: 40
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Sole Proprietorships
is when the company is owned by a sole person for a profit
- real estate agents or a painter
- its their company.
Sole Proprietorship Advantages
- single taxation
- easy
- cost of formation
- control of the business
- sec rec distribution
- use of profits
- government regulation
- easy to close down
Sole proprietorship Disadvantages
- Unlimited liability
- limited sources of funds
- limited skills in all areas
- limited ability to attract and retain talent
- lack of permanence.
Partnership
a business is run with 2 or more ppl who operate as co-owners of a business for profit. Represents just 8 percent of u.s. businesses and accounts for 10% of sales and 19 % of income.
Partnership Advantages
- single taxation
- ease of organization
- availability of capital and credit
- combined knowledge and skills
- decision making
- regulatory controls.
Partnership Disadvantages
- unlimited liability
- distribution/ sharing of profits
- limited sources of funds
- decision-making
- life of the partnership
- Challenges to friendships
Three Types of Partnerships
- general
- limited
- limited liability partnership
General Partnership
partners share equally in both responsibility and liability
Limited Partnership
In addition to one or more general partners, there are one or more limited partners.
- Limited Partners have limited liability, meaning they are only liable on debts incurred by the firm to the extent of their registered investment and have no management authority
Limited Liability Partnership
a partnership in which some or all partners have limited liability
one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of an unlimited partnership. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation.
Unlike corporate shareholders, the partners have the right to manage the business directly.
Corporations
a legal entity, created legally by the state, whose assets and liabilities are separate from those of its owners,
Corporations are treated as individuals.
Two Types of Corporations
C and S
C Corporation
Once the corporation is created, it becomes its own entity with an unlimited life span, provided it pays its yearly filing fee without fail. Most of the major companies that exist in US are incorporated under C Corporation.
S Corporation
elects a special tax status with IRS. As far as the IRS form filing date is concerned, it must be filed within 75 days of incorporation in order to be considered as an S-Corp for taxing related purposes.
smaller
C Corporation Advantages
- Limited liability
- transfer of ownership
- perpetual life
- access to sources of funds and credit
- expansion potential
C Corporation Disadvantages
- Double taxation
- forming a corporation
- disclosure of information
- employee-owner separation
- government regulations
Taxes are highest of corporation, sole proprietortship or partnership?
Corporation
S Corporation Advantages
- Limited liability
- single taxation
Disadvantages of an S Corporation
- must be a domestic u.s. enterprise
- all shareholders must be u.s. citizens- no foreign ownership
- limited number of shareholders- less then 100
- limitations on who shareholders may be: individuals, estates, trusts one class of stock.
Globalization of Markets
The froth of global trade and our trading partners, firms engage in global trade in chance of making more money by going around the world instead of staying domestically.
Why do Nations Trade?
- to obtain raw materials and goods that are:
- otherwise unavailable (no nation has it all)
- available elsewhere at a lower price.
- To foster relationships,
Two Types of Advantages that Determines Which Goods Nations Trade
Comparative and Absolute Advantages
Comparative Advantage
Country specializes in products that it can supply more efficiently or at a lower cost then it can produce other items.
Example of Comparative Advantages
- us agriculute commodities, corn and wheat the us is stronger for those good then say japan since we have the great plains.
- Advantages change as markets and countries develop
Absolute Advantage
a rare monopoly that exists when a country is the only source of a an item only producer of an item and most efficient producer of an item, and example of this would be DeBeers consolidated Mines,Ltd. Virtually controls the world’s diamond trade
Trade Benefits
- enhances competition
- increases efficient specializations
- increases economies of scale
- lowers prices increases availability
- creates new consumers
- creates jobs in and out of the country that need and makes the product.
Trade Disadvantages
- unemployment in specific sectors
- income inequality in the u.s.- lower skill jobs export (get outsourced cheaper) and the higher-skilled jobs get created makes it harder for the uneducated/unskilled
- income inequality in foreign countries, trade-off. In the last 10 years 16 million jobs were elimiated due to outsourcing and 17 million jobs were created 1 million more were created then destroyed.
Trade Barriers
- lower job losses
- higher prices
- increased costs.
Trade Adjustment Assistance Program
- Eases impact on affected workers
- gives training health insurance, allowances.
Increase worker mobility
portable pensions and insurance.
Import/Export Structure of International Trade
when a country sends its products to another country or take other countries products that have comparative or absolute advantage in the markets, like toys from china or corn from the U.S.
Licensing and Franchising
taking a company and allowing others to take a part in it while taking most the profits but pay a % of profit for using the name like starbucks or resturants (I.e. hooters)
Contract Manufactoring
uses other companies to make parts for your company that way it is less work on your shoulders many weapons companies do this, to get the trigger for a gun go to another compnay so its less for you to manufacture,
Joint Ventures and Alliances
when two companies realize they can do well with each other and join companies
FDI (Foreign Direct Investment)
when a company like honda buys a building in another country to start to make another branch of their company in another company
International Trade Barriers
- economic
- legal/political
- social/cultural
- technological
Trade Protectionism
the use of government regulation to limit the import of goods and services.
Tariffs, Quotas, Embargos subsides
What are the Benefits of Trade Protectionism?
- protects domestic industries-jobs
- emerging industries, national security
- counter foreign practices
- Reduces competition/ restricts free trade: increases prices
- reduces export gains negative effect on the freeness and the success of the international marketplace
Makes it so it is difficult or almost impossible for a foreign company to take over a market
Economic Barriers of Trade
- Level of countries economic development
- level of existing infrastructure development
- currency exchange rates
Social and Cultural Barriers of Trade
- understanding differences among the cultures and countries can be very important.
- Spoken and written language, body lang and personal space, family roles…other social roles…gender roles…
- Perception of time
- Religious holidays and local customs.
Technological Barriers of Trade
- Varying levels of technology development and infrastructure
- Marketing data, Telephone lines, It networking , Delivery trucks ……how all play a role in how things are done and how it differs in other countries.
GATT (General Agreement on Tariffs and Trade)
- Treaty after wwii provided a forum for tarriff negotiations and discussion
- Objective=reduction of tariff barriers to international trade
- Spawned wto in mid-1990s
WTO (World Trade Organization)
- Institution-Deals with the rules of trade between nations;
- Supervise and liberalize international trade
NAAFTA (North America Free Trade Agreement)
Eliminates most tariffs and trade restrictions on agricultural and manufactured products among Canada Mexico and us 2004-2009 it’s the largest trade block in the world.
About this deck
By: Kenzie Walker
Created: 2011-09-21
Size: 44 flashcards
Views: 40
Created: 2011-09-21
Size: 44 flashcards
Views: 40
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis