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- 1. Advanced eMedia Management A. Brian Dengler September 5, 2012
- 3. Meet Jean Poole • She started a hyperlocal site, “The Local Scoop” that covers local news in Bucksnort, Tennessee. • She owns a nice house.
- 4. The Local Scoop • Jean Poole hires Rex Carr to post articles for her. • Rex writes a story that Jack Pott embezzled $30,000 from the Bucksnort National Bank. • The story isn’t true. Photos by Krystian_O under Creative Commons License
- 5. The Local Scoop • Jean and Rex are sued for defamation. • A jury finds Jean liable for $100,000 for defamation as publisher of the Local Scoop. • Jean goes out of business and loses her house. • What went wrong?
- 6. The Problem • Jean operated The Daily Scoop as a “Sole Proprietor.” • She did not create a corporation that would shield her business from personal liability. • This is the reason why we begin the course with looking at business organizations. • You don’t want to lose your shirt managing emedia.
- 7. Business Organizations • Sole Proprietor • Partnership • Limited Liability Corporation • Corporation • Non-profit Corporation
- 8. Sole Proprietor • An individual runs a business. • There is no formal requirement to set up the business. • The individual gets all the profits --- and all the liability. • The individual’s personal assets, that is, bank accounts, property, are exposed to pay debts and liabilities.
- 9. Partnership • Two or more individuals set up a business. • You need a partnership agreement to divide profits and manage the business. • How can a partner get out of the business? • For any liabilities – like bank loans – partnership assets are used first to satisfy any debt. • Individual partners are liable.
- 10. Limited Liability Corporation • Very Popular. Owners are “members,” not stockholders. • You need an agreement to manage relationships among members. • You need to incorporate with state. You need articles and bylaws. • Only company assets are exposed to liability. • No double tax – income (profits) are up- streamed to members.
- 11. Corporation • Applies to large companies that sell stock to multiple shareholders. • Incorporators need to file articles of incorporation with state, have by-laws. • Double taxation – corporation pays income tax, shareholders taxed additionally for sale of stock or dividends.
- 12. Corporations • Publicly traded stock must be registered with the SEC. • Corporation must provide quarterly and annual filings on performance. • Corporations usually managed by board of directors.
- 13. So…what’s the big deal? Jean Poole forms “The Local Scoop LLC” Jack Pott can R recover only e from Rex and x LCC. Jean gets to keep her C house. a r r
- 14. What if you do PR for a Company? • Coca-Cola wants to set up a blog that provides solely human interest stories about persons who benefit from Coke charities. • Users are allowed to submit comments. • Users may post defamatory comments or pictures that violate copyrights.
- 15. What if you do PR? Coke sets up “Coke Blog LLC” to run Blog Users upload content that may be Another entity sues a problem for copyright infringement, etc. Coke isolated from liability.
- 16. Non-Profit Corporation • Must incorporate as non-profit under state law. • Must incorporate for educational and charitable purposes. • Must file for 501(c)(3) exemption. • No owners. • Pay people.
- 17. Quiz • Quiz No. 1 is located at http://www.proprofs.com/quiz- school/story.php?title=ksu-advanced-emedia- management-quiz-no-1-952012 • Your responses are due 11:59 pm, September 11, 2012. • Keep track of your answers. ProProfs does crash!!