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Forms of ownership (Advantage of merger&Acquisition (increase revenue…
Forms of ownership
Advantage of merger&Acquisition
increase revenue by cross-selling products to each other's customers
increase market share by combing product line
increase their buying powet
new expertise,system & teams of employees
Disadvantage of merger and acquisition
executives have to agree on how the merger will be financed
managers need to decide who will be in charge after join forces
marketing departments need to figure out how to blend product lines,branding strategies & adverttisement
lay-off
Forms of business ownership
Partnership(limited liablitity)
limited partnership(one or more partners act as general partners,run the business)
master limited partnership(MLP)-allowed to raise money by selling units of ownership
general partnership(partners have joint authourity to make decision for firm's financial obligations
limited liability partnership(LLP)
Corporation
public corporation
Special type
S corporation
Limited liability company(LLC)
benefit corporation
private corporation
Advantages
ability to raise capital
liquidity
longevity
limited liability
Disadvantages
managerial demands
cost & complexity
double taxation
possible lost of control
Sole proprietorships(unimited liablity)
Advantages
privacy
flexibility and control
single layer of taxation
fewer limitations on personal income
simplicity
Disadvantages
resource limitation
demands on the owner
financial disability
no employee benefits for owner
finite life span
Merger
an action taken by 2 companies to combine & perform as single entity
Types of merger
vertical merger
horizontal merger
Acquisition
an action taken by 1 company to buy a controlling interest in the voting stock of another company
Hostile takeover(against wish of the management)
strategic alliance & joint venture
strategic alliance :long-term artnership between companies to jointly develop,produce products
joint venture :a separate legal entity established by 2 or more companies to pursue shared business objectives