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OWNERSHIP - Coggle Diagram

- - - - least 1 general partner who assumes unlimited liability
        
        Manages business
        
        get profits
        
        Accepts loss risk
      - least 1 limited partner whose liability is limited to investment
        
        Not participate in managing
        
        share profits in accordance to partnership agreement
        
        Loss risk: limited to their investment
    - - Only available in some provinces
      - Popular among legal and accounting firms
      - Partners: Not responsible for losses caused by other partners
    - - Each partner = unlimited liability for debts (equally shared debts)
      - Ex: lawyers , accountants, architect offices
      - Complete sharing in management + liability of the business
  - - - Initially contribitted money or assets
      - Partners management role
      - allocation of profits or losses
      - how partners can leave agreement
    - - legal document that outlines the basic agreement between partners
  - - - Partnership Act
  - - - Partners = diff/ talents & specialize in respective talent areas
      - Ex: Steve Wozniak & Steve Jobs
    - - More financial resources
      - larger buss = more earning power = better credit rating
    - - Easy to fill forms to register
    - - <regulatory than corporation
      - Must abide by laws of industry/ profession
    - - React quickly to competitors or changes in economy
  - - - General partnership: each partner = equal debt share
      - disadvantage 1 partner if they have more personal resources
    - - Bad decision from 1 = other's resources @ risk
      - personal situations (ex: divorce) can affect financial resources for firm
    - - Likely to happen
    - - Partnership = finish IF 1 partner die/withdraws
      - difficult to sell/buy parts if method of valuation not predeterminted (ex: sell a hocky school share)
    - - Profits: distributed in accordance to proportions outlned in agreement
      - cause conflict if work effort does not match profit distribution
    - - limited
- - - - set long-range objectives
      - Hire corporate officers
        
        Ex: CEO, marketing officers, etc.
      - A group of people elected by shareholders to oversee the general operation (voting by once/year, once/period)
      - Have expertise in a specific area
      - Inside & outside directors (work in/out day in day of corporation)
    - - Preferred shares
        
        owners have claim to profit before other shareholders
      - Common shares
        
        voting rights but not preferred treatment with dividends
  - - - Can buy/sell shares
        
        No termination of buss
        
        No permission from other shareholders
    - - Unaffected by death of shareholders
    - - liability/potential loss: limited to original investment
      - IF fails: shareholders no responsible for firm debt
    - - Easiest raise money = sell shares
    - - easier to find long term- financing
    - - Tax rate < Sole proprietorships & Partnerships
  - - - Owned by 1/ few people who are closely involved in managing the business
      - Can go public to
        
        help the company raise funds in the future
        
        invest the proceeds of the firm
        
        Allow founders of the company to realize value of buss
        
        Raise money
        
        make more profit
        
        pay debt
      - Go public by
        
        Initial public offering (IPO) = selling a corporation's shares on public markets for the first time
      - Ex: FB = raised $16US B
    - - Shares: anyone can buy/sell/trade on a public stock exchange
      - shareholders: not manage company
      - must disclose financial infor. in an Annual Report to Shareholders
      - Ex: Amazon, some banks, etc.
    - - Owned, operated by provincial/ federal government
      - Focus on providing a service > profit
      - Ex: Canada Post
    - - Focus on providing service> earning a profit
      - Not owned by a government entity
      - Ex: Children Wish
  - - - shareholders: taxes on dividends
      - double taxation but it lower tax rate = Not really disadvantage
      - must pay taxes on its income
    - - more costly
      - often: lawyar needed
    - - must: create Annual Report to shareholders
      - much time spent to talk about plans, or why, etc. as oppose to do it
    - - shareholders demand: short-term results
      - Much focus on short-term = impact long term results
    - - employees: no own shares of corporation where they work (usually)
      - Employee not owners = may not work hard
  - - - enter into contacs with people/ other legal entities
      - can sue and be sued (corporations sue others)
      - can receive, own, transfer property
    - - Shareholders/ stockholders
    - - Profits left over after firm paid bills: distributed among shareholders = cash payment
    - - a "piece of the firm": can be bought/sold
- - - - ex: Tim Hortons x Cold Stone