BUS 200 Lecture Notes - Lecture 2: Limited Liability, Sole Proprietorship, General Partnership
BUS 200 Lecture 2 note
sole proprietorship
business owned by single person
PROS-easy to set up
flow through taxation- business taxes flow through personal (don't get double taxed)
CONS- unlimited liability (can't pass along to others)
general partnership
2 or more owners (Generally have same control)
CONS- both partners have unlimited liability
limited partnership
has general and limited partners
the limited partners have limited liability , but the general partners are not protected unless
they have a LLC
line function
directly advances core work
production, sales, marketing
staff function
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support functions
human resources, legal department, accounting, public relations
taskforce vs committee
task force is team of people from several departments temporarily brought together
committee is PERMANENT part of org designed to deal with regular tasks
profit
revenue-costs
barrier to entry
obstacles to prevent new companies from entering a market
protect established companies within industry
-scarce resources to make products
-pricing strategies that limit new companies potential
-economies of scale (unit cost per product because of mass efficiency)
-product differentiation- convincing customers to try new product
-government restrictions
-technology
-stiff competition
-patents
shareholder vs stakholder
shareholder owns shares of company (equity)
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stakeholder just has interest in company
(employee, or person who lives near power plant)
all shareholders are stakeholders, but not vice versa
research and development
conceive and design products (technology and pharmaceutical)
finance vs accounting
finance= manges cashflow of firm (monitors funds, makes sure company has enough funds)
accounting= keeps records
factors of production (inputs)
land, labor, capital, entrepreneurship
capital
the physical inputs of production
physical tools, plants, equipment for productivity (hammers, tractors, assembly belts,
computers, railroads)
factor endowment
whatever inputs you have lots of
ex. money, skilled or unskilled labor, fertile land, natural resources, human capital, etc
comparative advantage
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Document Summary
Bus 200 lecture 2 note sole proprietorship business owned by single person. Pros-easy to set up flow through taxation- business taxes flow through personal (don"t get double taxed) Cons- unlimited liability (can"t pass along to others) general partnership. 2 or more owners (generally have same control) Economies of scale (unit cost per product because of mass efficiency) Product differentiation- convincing customers to try new product. Manufacturing is important for wealth creation (and rich countries are manufacturing oriented) 2)taxation (improve unemployment, inflation stabilize business cycles influence interest rates) Not as good at macroeconomic stabilization as monetary policy hard to implement monetary policy. Implemented by fed (federal reserve) or fomc (federal open market committee- group within the fed) Control level of interest rates (low rates speed up, high rates slow down) slows things down when going to fast keeps us from crashing and burning.
