Unformatted text preview: (a zoning regulation).
Also, you need to register the name of
the business with local governmental
officials. To dissolve a sole proprietorship, you need only to stop doing
2. All decision-making power resides with
the sole proprietor. If you are the
owner of a sole proprietorship, you
alone can make all the business decisions. Having no stockholders or partners means that you decide whether to
expand your business, buy more supplies, advertise on the radio, and so on.
Decisions can be made quickly and easily, since only one person counts—the
3. The profit of the firm is taxed only
once. Among the different types of taxes
in the United States are sales taxes,
property taxes, corporate income taxes,
and personal income taxes. If you are
the owner of a sole proprietorship, the
profit you earn is counted as your
income, and only personal income taxes
(taxes paid on your income) apply.
Proprietorships do not pay corporate
income taxes (taxes paid on a corporation’s profits). As you will see, neither
do partnerships. Only corporations pay
corporate income taxes. 07 (154-185) EMC Chap 07 5/8/06 4:53 PM Page 161 Should
an MBA? ??? I t is the fastest growing sport in
America. It is the second most
watched sport on television, trailing
only pro football. What sport is it?
It’s NASCAR—National Association of
Stock Car Auto Racing. *
What explains the popularity and
rapid growth of NASCAR? Some have
suggested that it’s the danger and
drama associated with cars reaching
speeds of 190 miles per hour, and
life-and-death, win-or-lose decisions
being made in milliseconds.
Or maybe—just maybe—it is the
economics of competition and
cooperation that is visibly noticeable
on the racetracks. The same qualities that a driver needs to win stock
car races are the qualities one
needs to win in the business world.
Let’s see if we can identify these
At the longer stock car tracks,
such as Daytona and Talladega, the
way to out-compete your opponents
is to out-cooperate them. Specifically,
the way to win is to enter into a
“draft partnership” with other drivers.
In the 1960s, drivers learned
that if one stock car closely followed another, both cars increased
their speed. Two cars traveling
together in what is called a draft
line go faster than a single car traveling alone. Drafting explains why you will sometimes see as many as
10 cars, one right behind the other,
racing around the track for long
periods of time.
When drivers are “drafting,” they
are cooperating with each other. At a
certain point in the race one car in a
draft line will form a partnership with
another car to pass the front car. The
formation of this partnership will
often allow a car to pass what was
the front car. What we see in these
instances is one partnership breaking up and others being formed. The same lesson presents itself
in the business world. In the early
days of the computer business,
Microsoft and Cisco form...
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- Winter '14