Partnerships
LG2
OTHERS FORMS OF PARTNERSHIPS
• Master Limited Partnership Master (LPM) 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 (LLC) - Domestic LLCs
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 LLC generally offers liability protection similar to
that of a corporation but is taxed based on the number of
members.
5-14
Advantages of
Corporations
LG3
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
5-21
Advantages of
Corporations
LG3
The BIG BOYS of BUSINESS
1)
2)
3)
4)
5)
Walmart
Kroger
Walgreens
Home Depot
Target
About.Com - Retail Industry - 2013
5-22
Advantages of
Corporations
PRIVACY PLEASE
LG3
The 10 Largest Private Corporations in the U.S.
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
5-23
Advantages of
Corporations
LG3
EVEN the BIG GUYS MAKE MISTAKES
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.
5-25
Individuals
Can
Inorporate
OLDIES BUT GOODIES
LG3
American’s Oldest Corporations
COMPANY
YEAR
STARTED
INDUSTRY
Harvard Corporation
J.E. Rhoads & Sons
Covenant Life Ins.
1636
1702
1717
Education
Conveyor Belts
Insurance
Philadelphia
Insurance
Dexter
D. Landreth Seeds
1752
Insurance
1767
1784
Adhesives & Coatings
Seeds
Bank of New York
1784
Banking
5-27
Advantages of
Corporations
MAKE WAY for the NEWBE
LG3
Top New Franchises
Rank
Company
Start-Up Costs
1
Anytime Fitness
$56.29K - $353.89K
2
Hampton Hotels
$3.7M - $13.5M
3
Subway
$85.69K - $262.85K
4
Supercuts
$108.75K - $203.6K
5
Jimmy John’s Gourmet Sandwiches
$300.5K - $489.5K
6
7-Eleven, Inc.
$30.79K – $1.63M
7
Servpro
$134.8K - $183.44k
8
Denny’s
$1.17M - $2.4M
9
Pizza Hut
$297K - $2.1M
10
Dunkin’ Donuts
$294K - $1.51M
Entrepreneur’s Franchise 500 © 2014
5-39
HOME SWEET HOME
Advantages of
Corporations
LG3
Top Home Based Franchises
Rank
Business Type
Start-Up Costs
1
Security & Commodity Broker
Phone, Computer, Internet & Registration Fee: $5K
2
Software Publishers
Software Designing Knowledge, Phone, Computer &
Internet
3
Artists, Writers & Performers
Head Shots, Portfolio & Agent Fees
4
Insurance Agents & Brokers
Insurance Trained, Registered in State, Phone, Computer
& Internet
5
Specialized Design Services
(Graphics, Interior & Clothing)
Computer, Software/3-D/Interiors, Printer, Phone &
Internet
6
Consulting Services
Specialty Training, Phone, Computer, Printer & Internet
7
Personal & Household Goods
Repair & Maintenance
Specialty Training, Tools ($5K-$15K), Vehicle, Phone,
Licensing & Insurance
8
Real Estate Agents & Brokers
Specialty Training, Licensing, Insurance, Phone,
Computer, Printer & Internet
9
Electronic & Precision Equipment
Repair & Maintenance
Training with PC & MAC’s, Tools, Manuals, Computer,
Internet & Software
10
Grant Making & Giving Services
Computer, Software, Event Planner, Internet & Printer
www.forbes.com © 2014
5-46
HIGH FLYERS
Advantages of
Corporations
10 Top Franchises
LG3
1
Hampton Hotels
2
Subway
3
Jiffy Lube Int’l, Inc.
4
7-Eleven, Inc.
5
Supercuts
6
Anytime Fitness
7
Servpro
8
Denny’s, Inc.
9
McDonald’s
10
Pizza Hut, Inc.
Entrepenurers.com © 2014
5-51