Starting a Business: LLCs and Other Options An unincorporated business owned by one personAdvantages Can run a business without taking any formal steps to create an organization Not required to register with the government Not required to file a separate tax returnDisadvantages Owner responsible for all of the business’s debts Owner of a sole proprietorship has limited options for financing the business ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Limited liability Protects managers and investors from personal liability for the debts of the corporation and the actions of othersTransferability of interests Provide flexibility for enterprises small and largeDuration Perpetual existence: Can continue without their founders ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Logistics Corporations involve a lot of expense and effort to create and operateTaxes Because corporations are taxable entities, they must pay taxes and file returns ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Shareholders of S Corps have: The limited liability of a corporation The tax status of a partnershipRestrictions faced are: There can only be one class of stock There can be no more than 100 shareholders Shareholders cannot be partnerships or other corporations Shareholders must be U.S. citizens or residents Shareholders must agree that company should be an S corporation ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. A company whose stock is not publicly tradedCommon provisions of close corporations: Protection of minority shareholders Transfer restrictions Flexibility Dispute resolution ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. An LLC offers the limited liability of a c.

1. Starting a Business: LLCs and Other Options
An unincorporated business owned by one personAdvantages
Can run a business without taking any formal steps to create an
organization
Not required to register with the government
Not required to file a separate tax returnDisadvantages
Owner responsible for all of the business’s debts
Owner of a sole proprietorship has limited options for financing
the business
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Limited liability
Protects managers and investors from personal liability for the
debts of the corporation and the actions of othersTransferability
of interests
Provide flexibility for enterprises small and largeDuration
Perpetual existence: Can continue without their founders
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly

2. accessible website, in whole or in part.
Logistics
Corporations involve a lot of expense and effort to create and
operateTaxes
Because corporations are taxable entities, they must pay taxes
and file returns
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Shareholders of S Corps have:
The limited liability of a corporation
The tax status of a partnershipRestrictions faced are:
There can only be one class of stock
There can be no more than 100 shareholders
Shareholders cannot be partnerships or other corporations
Shareholders must be U.S. citizens or residents
Shareholders must agree that company should be an S
corporation
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
A company whose stock is not publicly tradedCommon
provisions of close corporations:
Protection of minority shareholders

3. Transfer restrictions
Flexibility
Dispute resolution
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
An LLC offers the limited liability of a corporation and the tax
status of a partnership
Limited liability: Members are not personally liable for the
debts of the company
Tax status: Income flows through the company to the individual
members, avoiding double taxation of a corporation
Formation: To organize an LLC, charter and operating
agreement is necessary
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Flexibility : Can have members that are corporations,
partnerships, or nonresident aliensTransferability of interests:
Members must obtain the unanimous permission of the
remaining members before transferring ownership
rightsDuration: LLC can continue in operation even after a
member withdrawsGoing Public: Loses its favorable tax status
and is taxed as a corporation, not a partnership
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scanned, copied, or duplicated, or posted to a publicly

4. accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Changing Forms: Not considered a sale and does not have the
same adverse tax impactPiercing the LLC veil: If corporate
shareholders do not comply with the technicalities of the law:
May be held personally liable for the debts of the
corporationLegal Uncertainty: New form of organization and
the issues of law are not clear
Lawsuits are expensive in both time and money
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Choices: LLC v. Corporation
Tax status of an LLC is a major advantage over a corporation
Reasons for venture capitalists to prefer C Corporations
Arcane tax issues
C corporations are easier to merge, sell, or take public
Corporations can issue stock options
General legal uncertainty involving LLCs
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.

5. Hybrids are called:
Flexible-purpose organizations
Benefit corporations
Low-profit limited liability companies
Community interest companiesSuch businesses focus on the
interests of:
Stakeholders
Community
Environment
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Partnership: An unincorporated association of two or more co-
owners who carry who operate a business for profitEach co-
owner is a general partner
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Taxes: Profits flow through the ownersLiability: Partner is
personally liable for the debts of the enterprise
Whether or not she caused themManagement rights
Partners share both profits and losses equally
Each partner has an equal right to manage the business
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.

6. ©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Management duties: Have a fiduciary duty
Partners are liable to the partnership for gross negligence
Partners cannot compete with the partnership
Partner may not take an opportunity away from the partnership
unless the other partners consent
If a partner engages in conflict of interest:
He must turn over to the partnership any profits he earned from
that activity
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Transfer of Ownership
Firm cannot sell shares
Partner has the right to transfer the value of partnership
interest:
Not the interest itselfFormation: Easy to form
If two or more people do business together, sharing
management, profits and losses:
They have a partnership and subject to all rules of partnership
law
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.

7. Partnership by estoppel exists if:
Participants tell other people that they are partners, or allow
other people to say that they are partners
Third party relies on this assertion
Third party suffers harmTermination
Dissociation: When a partner quits a partnership
Partnership can either:
Buy out the departing partner(s) and continue in business
Wind up the business and terminate the partnership
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Partners are not liable for debts of the partnership An LLP is
not a taxable entity and it has the right to choose its duration
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Structure
Limited partnerships must have at least:
One limited partner and one general partnerLiability
Limited partners are not personally liable:
General partners are liable
Limited liability limited partnership:
General partner is not personally liable for the debts of the

8. partnership
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Taxes
Limited partnerships are not taxable entitiesFormation
General partners must file a certificate of limited partnership
with their Secretary of StateManagement
General partners have the right to manage a limited partnership
Limited partners have few management rights
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Transfer of Ownership
Limited partners have the right to transfer the value of their
partnership interest
Can sell the interest itself if agreement permitsDuration
Limited partnerships have perpetual existence
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.

9. Most professionals are allowed to incorporateProvide more
liability protection than a partnershipCorporation may be liable
for an individual member’s mistakes, but the innocent
professionals are not at risk
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Limitations
All shareholders of the corporation must be members of the
same profession
Required legal technicalities for forming and maintaining a
professional corporation are:
Expensive and time-consuming
Tax issues can be complicated
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Partnership for a limited purposeEach organization retains its
own identity
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.

10. Are not actually a separate form of business
They can take almost any one of the ones discussed
alreadyFranchising is a compromise between employment and
starting your own businessFranchisees have freedom to make
many choices, but are limited in other waysCan be very costly
to acquireFranchisors must comply with the Federal Trade
Commission’s rule
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Franchisor must deliver to a potential purchaser a Franchise
Disclosure Document (FDD)
Purpose is to ensure that the franchisor discloses all relevant
facts
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
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scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
Instructions:
Using the information below on McDonalds and Burger King –
Looking at the organizational structures note the domestic and
international divisions
Based on your reading..... use Hofstede's indexes for
comparisons and to cite
1) Describe the organizational international/global structure of
each company - compare

11. 2) Utilize/attach each company’s global/international
organizational chart – compare
Write a short page using the above #1 and #2 comparisons on
McDonalds and Burger King – the previously used info is below
for reference. Uses APA format for citations. (at least 3
references)
INFO to start from:
1. McDonald’s indicated upward trend in its sales across all
segments per statistics of 2017.
The same store sales of McDonald’s surged by 5.5 percent
internationally and the similar sales of the company grew by 4.5
percent domestically in the United States (Jargon, 2018). The
overall sales of Burger King in 2017 were $93.7 million
(Restaurant sales of Burger King, N.D). Burger King’s same
store sales increased by 4.5 percent. According to statistics, the
total number of individuals who visited any of Hilton Hotels at
night in the United States accounted for 23.81 million (Number
of people, N.D).
2. In 2017, McDonald’s earned a profit of $22.82 billion across
the globe. While $8 billion were earned domestically in 2017.
Burger King generated overall earnings of $1.23 billion
(Whitten, 2018). In 2017, Marriot international produced an
overall revenue of $22.9 billion. Whereas, Hilton Hotel almost
$9.14 billion revenue in 2017.
3. One of the major challenges that is being faced by
McDonald’s is to alter the image of the food chain in the eyes
of the people from being “Junk food restaurant” to “Healthy
food restaurant”. Another main challenge which McDonalds is
confronting recently is to alter the attitude of its consumers who
carry on buying only junk food items from McDonald’s despite
the fact that it has introduced many new and nutritious food

12. items (Deng, 2009). Likewise, Hilton Hotels is facing an issue
of management of diverse human resources because of large
number of operating branches worldwide (Maxwell, 2002).
Second major challenge confronted by Hilton Hotels is the
maintenance of quality and business productivity. The key
challenges that are faced by Marriot International include its
merger with Starwood. It has to cultivate the passion and power
which Starwood possessed. Also, they have to prioritize
innovation upon functional logic to embrace success (Shealy,
2016). Two main issues faced by Burger King include increased
competition and average level creativity in business
undertakings (Brady, 2010)
Work Cited
Jargon, J. (2018). ‘Value Meals Drive McDonald’s Sales’.
Retrieved from: https://www.wsj.com/articles/mcdonalds-meal-
specials-new-menu-items-feeding-sales-1517321212
“Quarterly revenue of McDonald’s Corporation worldwide from
2012 to 2017” (N.D). Retrieved from:
https://www.statista.com/statistics/663931/quarterly-revenue-
of-mcdonalds/
“Restaurant sales of Burger King from 2013 to 2017 (in million
U.S. dollars)” (N.D). Retrieved from:
https://www.statista.com/statistics/630389/burger-king-
restaurant-sales/
Whitten, S. (2018). “Shares of Burger King Owner spike on
profit beat, better sales at burger chain”. Retrieved from:
https://www.cnbc.com/2018/02/12/burger-king-fourth-quarter-
earnings-2017.html
‘Number of people who spent a night at Hilton hotels within the
last 12 months in the United States from spring 2008 to spring
2017’ (N.D). Retrieved from:
https://www.statista.com/statistics/227561/hilton-hotel-guests-
usa/
Deng, T. (2009). ‘McDonald’s New Communication Strategy on
Changing Attitudes and Lifestyle’ International Journal of
Marketing Studies, 1(1), p.37-42.

13. Maxwell, G. (2002). ‘Strategic HRM and business performance
in the Hilton Group’ International Journal of Contemporary
Hospitality Management, 14(5), pp.251-252.
Shealy, G. (2016). ‘Marriott-Starwood: Marrying the Great
Executor with the Great Innovator’. Retrieved from:
https://scs.georgetown.edu/news-and-
events/article/5809/marriott-starwood-marrying-great-executor-
great-innovator
Brady, D. (2010). “The challenges facing Burger King Buyer 3
G capital” Retrieved from:
https://www.bloomberg.com/news/articles/2010-09-08/the-
challenges-facing-burger-king-buyer-3g-capital