当代商学概论 1

privately held profit private companies: LLC or S corp.; do not publicly offer their stock; owned by one or a few shareholders who normally have family or other close ties and also manage the business publicly held profit private companies: C corp. (also called LLC by share, public company, publicly traded company, public listed company); publicly offer and freely trade their shares on stock exchanges; owned by a number of unrelated shareholders who do not actively manage the company (passive investors, cf. limited partners); go public, IPO 首次公开募股
land
capital
productive resources
enterprise
labor
2. Forms of business ownership
Three basic legal (vs. organizational) forms of business ownership：
1. sole proprietorship (个人)独资企业 2. partnership 合伙企业 3. company 公司
2.4.2 S corporation S 公司
for United States Federal income tax purposes, an S corporation is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. has 100 or fewer owners and satisfies other criteria the owners have limited liability, which may be restricted by various rules the earnings are distributed to the owners and taxed at the respective personal income tax rate of each owner
2.2 Sole proprietorship
advantages & disadvantages
D4: lack of continuity If the owner dies or becomes too ill to manage the business, there is no separate legal entity in existence with which the public, creditors, suppliers or employees can deal to ensure the continuity of the business.
privately owned
profit
non-profit
privately held (s corp., LLC)
publicly held (usu. C corp.)



publicly owned companies: established by the government, e.g. the U.S. Postal Service, big 4 banks in China, CNPC, Sinopec, CNOOC quasi-publicly owned companies: established privately, but operated for public service and with high degree of government regulation and protection, e.g. private schools and hospitals private companies: established privately and operated for private interests; including the bulk of existing companies
owners
board of directors president/GM/CEO/managing director
managers
other officials
2.4.1.2 Corporate charter & legal person

Corporate charter 公司章程: a document used to incorporate a business, and filed with the state government The charter describes important aspects of the corporation, e.g. the name of the firm, the stock issued, and the firm’s operations Bylaws 公司规章 are established to provide general guidelines for managing the firm
6% 4%
10% 70%
90%
sole proprietorships
partnerships
corporations
sole proprietorships
partnerships
2.4.1.1 Corporate structure and management
incorporators/shareholders
Exercises
money (capital & profit)
company
products (goods & services)
people
What is business?
market
communication conferences, negotiations & trips
countries & cultures

profit private companies: established to carry out business for profit-making purposes

non-profit private corporations: established for charitable or religious purposes


2.4.1.3 Advantages & disadvantages
A4: continuous life (perpetual continuity) Theoretically, a corporation has a perpetual existence; it continues until dissolved, merged, or terminated for other reasons. D4: agency problem High-level managers may make decisions that are in their best interests, at the expanse of shareholders.

Unlimited Liability Company 无限责任公司 Limited Liability Company (LLC) 有限责任公司 S corporation S型股份有限公司 C corporation C型股份有限公司
enterprise > company > corporation
1. The nature of business
Business is: the exchange or trade for things people want or need the production, distribution and sale of goods and services for a profit a goal-directed behaviour aimed at getting and using productive resources to buy, make, trade, and sell goods and services that can be sold at a profit (Source: Jones, 2007. Introduction to Business: How Companies Create Value for People)
2.3.2 General partnership 普通合伙 企业 vs. limited partnership 有限 合伙企业 2.3.3 Advantages & disadvantages
2.4 Company
company
publicly owned
quasi-publicly owned
2.1 Factors to be weighed in decision-making



ease of formation liability for business debts control over the operation management expertise available financial resources available taxation policies continuity legal capacity