Introduction to Business

Chapter 4 Options for Organizing

Business
Chapter 5 Small Business,
Entrepreneurship, Franchising
Present by (2nd Group):
Abdul Ajid
Ardian Muthahar
Defi Chushnul Chotimah
Priscilla Novelia
Raja Agus Lukasta
MASTER OF MANAGEMENT
UNIVERSITAS GADJAH MADA

Chapter 4 Option for Organizing

Business

Contents :
1. Proprietorships
Adventages & Disadventages
2. Partnerships
Type of Partnerships
Adventages & Disadventages
3. Corporations
Creating Corporations
Type of Corporations
Element of Corporations
Adventages & Disadventages
4. Other Types of Ownership
Joint Venture
S Corporation
Limited Liability Company
Coorperatives
5. Trends in Business Ownership : Mergers & Acquisitions

1. Proprientorships
Business owned and operated by one individual
Adventages :
Ease and Cost of Formation
Secrecy (Kerahasian)
Distribution & Use of Profits
Flexibilty & Control of the Business
Easy Goverment Regulation
Individual Income Taxation
Closing the Business

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Disadventage :
Unlimited Liability
Limited Sources of Funds
Limited Skills
Lack of Continuity
Lack of Qualified Employees
Taxation

2. Partnerships
An association of two or more person who

carry on as co-owners of a business for profits

Types of Partnership
General partnership
Limited partnership
Adventages :
Ease of Organization
Availability of Capital and Credit
Combined Knowledge and Skills
Easy Decission Making
Regulation Control

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Disadventages :
Unlimited Liability
Business Responsibility
Life of Partnership
Distribution of Profits
Limited Sources of Funds

3. Corporations
A legal entity created by the states, whose assets

and liability are separated from its owners

Types of Corporations :
Private Corps
Public Corps
Elements of a Corporation :
Board of Directors
Stock Ownership
Adventages :
Limited Liability
Ease of Transfer of Ownership
Continuity Life
External Sources of Funds
Expansion Potencial

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Disadventages :
Double Taxation (Corps tax and Individual tax
Costly Forming a Corporation
Disclosure of Information
Employee Owner Separation

4. Other Type of Ownership

Type of Ownership :
Joint Venture
S Corporation
Limited Liability
Cooperatives

5. Trends in Business Ownership :

Mergers and Acquisitions
Mergers : occurs when two company (corps)

combined to form a new company

Example :
Acquisitions : occurs when company
purchases another generally by buying most
of its stocks
Example :

Chapter 5
Small Business,
Entrepreneurship and
Franchising

Content :
1. The Nature of Entrepreneurship and Small
Business
Adventages and Disadventages of Small
Business- Ownership
2. Starting Small Business
3. The Future for Small Business
4. Making Big Businesses Act Small

1. The Nature of Entrepreneur and

Small Business
Entrepreneurship : the process of creating and managing

a business to achieve desire objectives

Small business : any indenpendently owned and operated
business that is not dominant in its competitives area and
doesnt employ more than five hunded people
The Role of Small Business in the American Economy
More than 99 % of all US forms are classified as small
businesses, and they employe 50 % of private workers
Industries That Attract Small Business :
Retailing and Wholesalling
Service
Manufacturing
High Technology

2. Adventages & Disadventages of Small

Business-Ownership
Adventages :
Independence (Be Boss)
Cost (Less money to start)
Flexibility to addapt changing market demand
Focus
Reputation
Disadventages of Small Business :
High Stress Level
High Failure Rate

3. Starting Small Business

Business Plan
Forms of Business Ownership (Entepreneur has to

decide on appropriate legal form of business

ownership
Financial Resources
Equity Financing
Debt Financing
Approaches to Starting a Small Business
Starting from Scratch vs Buying an Existing Business
Franchising : a license to sell another product or to
use another name in business or both

4. The Future of Small Business

Demographic Trends :
Many expert believe that the boomer

demographic is the market of future

Technological and Economic Trends :
Technological advance an increase in service
exports have created new opportunities for
small company to expand their operation

5. Making Big Businesses Act Small

Intrapreneurs : Individual in large firms who

take responsibility for the development of

innovation within the organization