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Class Note - Organization and Franchising -- ent 2016 doc -...

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ENTREPRENEUR CLASS NOTESORGANIZATION – PARTNERSHIPS - FRANCHISINGORGANIZATIONAL ISSUES1.CONTROL – who will control the business and how?2.LIABILITY – if we get sued, will weorthe businessoris thepartnershiporcorporation separateenoughfrom us?IMPORTANT – high net worth individuals will not put money intoyour business if they are not protected from lawsuits –It is not worth it to them.3.TAXES – corporations are taxed twice in the USA - ouch4.COST – how much does it cost to organize the business?NUMEBR ONE ADVICE – GET A VERY GOOD LAWYERPartnershipsEach partner is jointly and severally liable and the damaged partnercan pursue each and all.IssuesManagement responsibilitiesHow profits and losses will be allocatedSalariesManagement responsibilitiesConsequences of withdrawal, retirement, disability or deathMeans of dissolutionAdvantagesSimplicity (some legal cost)More pool of capitalNot subject to second level taxation1
ENTREPRENEUR CLASS NOTESORGANIZATION – PARTNERSHIPS - FRANCHISINGDisadvantagesSharingRaising outside moneyRisk from other partnersCost of benefits may not be tax deductibleDecision making may be slowerTwo heads are not better than oneMessy Costly DivorceLimited PartnershipsHybrid form of organization – general partner has risk and say, limitedpartner has no risk, no say ----Reason = bring together competent management with wealthyinvestors who do not want to invest timeC CorporationsAdvantagesLimited liabilityRaise funds through the sale of stockTheoretically, unlimited lifeOwnership shares are transferableShares make hiring employees easierDisadvantagesDouble taxationSetting up is costlyMonitored by governmentOTHERS2
ENTREPRENEUR CLASS NOTESORGANIZATION – PARTNERSHIPS - FRANCHISINGS CorporationsLimited PartnershipsLimited Liability Corporations (LLC)Similar with Fewer MembersCOME TO CLASS THIS COMING WEEK …….……. MEET A VERY GOOD LAWYERThere Are Two Kinds of TrustDo I Trust You Will Not Steal From Me?Do I Trust Your Judgement?Partners“If you cannot find your own mission, partner withsomeone whom you can help” --- Roy DisneyMR/MS Inside -- OutsideFather/Son IBM – WatsonsMother/Daughter - Kathleen Kelly – You Got Mail3
ENTREPRENEUR CLASS NOTESORGANIZATION – PARTNERSHIPS - FRANCHISINGMom and Pop --- EverywhereBrothers --- Many ExamplesWright ---- Disney --- Warner -- ParkerClassis example = Stuart Crane and JefHP(Hewitt & Packard)Sears and RoebuckProctor and GambleBen & JerryBaskin and RobbinsKEY ISSUES - PARNERS

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Term
Spring
Professor
McClure,GW
Tags
partner, UFOC, ENTREPRENEUR CLASS NOTES

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