I. READ THE DEFINITIONS AND FIND TWO SAMPLES OF EACH ONE IN THE MARKET.
Companies operate in a range of industries (electronics, IT, retail etc.) Many companies regardless of industry, undertake activities across the same areas (research and development, marketing, production, sales, customer services etc.) There aredifferent types of companies (UK) or corporations(US).
Sole trader (UK): When someone has their own business with no additional shareholders. It is the easiest way of starting a business and you alone are responsible for all aspects of the business.
For example: Carpenter, Accountant.
Partnership: where more than two people or businesses work together.
For example: Toyota & Fiat.
Limitedcompany (UK): a private company where individual shareholders lose only the value of their shares if the company goes bankrupt. (Their liability is limited; they would not lose any property they owned.)
For example: Ares Ltd & Esus Ltd.
Plc. (Public Limited Company -UK): a limited company where the shares are bought and sold freely.
Such as: Colgate & P&G
Inc. The US equivalent of plc.In the US, companies can be incorporated (registered) with the authorities in the state where the HQ is based. To sell shares they need to approach the SEC (Securities Exchange Commission.)
For example companies such as: Pepsico Inc. & Coca-Cola Inc.
Multinational: a company that operates in different countries, usually with a complex structure, e.g. a parent company owns a subsidiaries. Theparent company may be a holding company with no independent activity.
Corporate structure can change when companies form an alliance.
For example: BIMBO & DHL
Merger: two or more companies join together to create a single larger company.
For example: BBVA BANCOMER & BANORTE-IXE
Takeover: similar to a merger with one company taking control by buying more than half of the shares.
Suchas: BBVA Bancomer & Banamex (CITIBANK)
Joint venture: two or more companies make a joint investment in a project without actually merging.
Such as: Unilever & Pepsico
ACTIVITY 2 Financing Sources for Your Startup
Posted on January 9, 2012 by Kevin Mulligan
READ THE ARTICLE AND ANSWER THE QUESTIONS BELOW.
Starting a business can be an expensive venture. In an idealsituation, you get your business off the ground with as few dollars as possible to try out the idea. Once the idea is proven or at least shows signs of success, you can ramp up your need for financing.
7 Business Startup Funding Sources
Here are 7 different sources of funding to consider when starting your business.
Your Own Income
You don’t want to bite off more than you can chew by gettingserious financing or investing a lot of money into sunk costs when starting your business. When you first start out you want to be as small and nimble as possible. If you have a regular job you can use your monthly income from work to finance the business on the side to prove the concept.
Cost and Risk: Missed opportunity to save for other personal goals, lost interest or growth if the money hadbeen saved or invested, but low financial risk since you are not going into debt to a third party.
There comes a time when you need to invest significant dollars into your business. Not many people have thousands of dollars sitting around to dump into buying equipment or supplies for a business venture. For many people the easiest method of funding has been their credit score. Onecredit card could approve you for the thousands of dollars you need to spend to ramp up.
Cost and Risk: You will pay high interest rates ranging from 14% to 20% while suffering higher risk, because you will still owe the money if your business fails.
Family and Friends
Your family and friends want to see you succeed. They may be willing to loan you money or buy into an equity stake in your firm...