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BUSINESS ORGANIZATIONS - Coggle Diagram
BUSINESS ORGANIZATIONS
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PARTNERSHIP (Società di persone :silhouettes:) A legal agreement between 2 or more people (max 20) to finance and run (gestire) a business together
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ADVANTAGES: - Easy to setup; - provides new skills and ideas; - a little more capital and investments.
DISADVANTAGES: - decisions must be shared and this can produce conflicts; - Unlimited liability (responsabilità illimitata); - limited capital; - no continuity; - profits must be shared (i profitti devono essere condivisi)
LIMITED COMPANIES / JOINT-STOCK COMPANIES / CORPORATIONS (società di capitali) :silhouettes: : The capital is divided into SHARES (azioni) and the people who invest are called SHAREHOLDERS (azionisti); the company profit is divided in proportion to the shares and is called DIVIDEND (dividendo). There is LIMITED LIABILITY; the company has SEPARATE LEGAL IDENTITY; The shareholders do not run the business directly, they elect a BOARD OF DIRECTORS (consiglio di amministrazione) who take decisions for them. At the head of the Board is the CHIEF EXECUTIVE OFFICER (CEO) (Amministratore Delegato)
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DISADVANTAGES: - Decisions can be slow; - Formation is complicated and expensive; - Shareholders and employees are distanced; - the annual accounts are open to public inspection.
MULTINATIONALS: are corporations that operate in multiple countries around the world. They have a legal status in each country in which they reside and must follow the lows of that country.
ADVANTAGES: - They generate wealth for countries; - they introduce new goods and services; - they spread ideas, goods and cultures.
DISADVANTAGES: - smaller businesses can go out of business; - they can manipulate laws to cut costs and save money; - they can generate more pollution.
A FRANCHISE is a LICENCE given from a large, well-known company to a smaller business to use its trademark and to sell its products (goods or services).
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FARNCHISEE: the smaller business that buys the licence paying an initial FRANCHISE FEE and an annual MANAGEMENT SERVICE FEE.
ADVANTAGES: the Franchisor provides: a well-known trademark, marketing strategies, training, operating systems and procedures and ongoing support.
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