Business Types of ownership. Type of Ownership General Funeral Service 78 %Proprietorship22 % 8...
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Transcript of Business Types of ownership. Type of Ownership General Funeral Service 78 %Proprietorship22 % 8...
BusinessBusiness
Types of ownershipTypes of ownership
Type of OwnershipType of Ownership
GeneralGeneral Funeral Service Funeral Service78 %78 % ProprietorshipProprietorship 22 %22 % 8 %8 % PartnershipPartnership 5 % 5 %14 %14 % CorporationCorporation 73 %73 %???? LLCLLC ????
$ Sales in the US economy $ Sales in the US economy 87 % by87 % by corporationscorporations
Who Owns?Who Owns?
ProprietorshipProprietorship one person one person
Partnership Partnership 2 or more 2 or more partnerspartners
CorporationCorporation Stockholders Stockholders
LLCLLC Members Members
Ownership issues in FSOwnership issues in FS
Multi-unit operationMulti-unit operationConglomerateConglomerateConsolidatorConsolidatorMergerMergerAcquisitionAcquisition
Funeral home / cemetery combinationFuneral home / cemetery combination
Corporations in FSCorporations in FS
Closely heldClosely held 94 %94 %
PublicPublic 6 % 6 %
Family operatedFamily operated 85 % 85 %
FranchiseFranchise
Is Is McFuneralMcFuneral or or Funeral KingFuneral King the future? the future?
What about What about Funerals – R – UsFunerals – R – Us??
NJNJ
Approx 700 FHApprox 700 FH “ “ “ “ 1685 licensees1685 licensees
(140 interns)(140 interns)
FH ownership in NJ?FH ownership in NJ?
34% multi – firm (unit) operation34% multi – firm (unit) operation
NJ multi-firm operationsNJ multi-firm operations
Ocean Co.Ocean Co. 63%63%Burlington Co.Burlington Co. 51%51%
Warren Co.Warren Co. 18%18%Gloucester Gloucester 23%23%BergenBergen 25%25%
Dual OperationDual Operation
2 or more funeral businesses operate from 2 or more funeral businesses operate from the same physical location.the same physical location.
(A type of multi-unit operation)(A type of multi-unit operation)
Requirements????Requirements????
NJ says – max 3 (and still called NJ says – max 3 (and still called dualdual))
CORPORATION TERMINOLOGYCORPORATION TERMINOLOGY
PUBLICPUBLICCLOSELY HELDCLOSELY HELDDOMESTICDOMESTICFOREIGNFOREIGNALIENALIENSub ‘S’Sub ‘S’
Public v. Closely heldPublic v. Closely held
PUBLIC - outstanding stock held by PUBLIC - outstanding stock held by large number of peoplelarge number of people
CLOSELY HELD - limited number of CLOSELY HELD - limited number of stockholders.stockholders.
DOMESTIC CorporationDOMESTIC Corporation
organized & principle organized & principle operations in state in operations in state in which it is charteredwhich it is chartered
FOREIGN CorporationFOREIGN Corporation
chartered in state different from chartered in state different from which it operateswhich it operates
ALIEN CorporationALIEN Corporation
organized in anotherorganized in another nation nation or or countrycountry
Sub S Corporation:Sub S Corporation:
creation of IRS, not creation of IRS, not corporate lawcorporate law
profits taxed as profits taxed as partnershippartnership
Requirements:Requirements:
Limited # of stockholders (100)Limited # of stockholders (100)only 1 class of stockonly 1 class of stockno nonresident alien stockholdersno nonresident alien stockholders limitations for partnerships, limitations for partnerships,
corporations, trust as stockholderscorporations, trust as stockholderscannot be subsidiarycannot be subsidiarycannot be foreign corporationcannot be foreign corporation
Partnership terminologyPartnership terminology
ACTIVEACTIVE
akaaka GENERAL GENERALLIMITEDLIMITEDSILENTSILENTSECRET SECRET DORMANTDORMANT
Partnership AgreementPartnership Agreement
To define To define
Purpose of partnershipPurpose of partnershipObligations of partnersObligations of partnersSharing of profits/losses Sharing of profits/losses Dissolution / dispute resolutionDissolution / dispute resolution
ACTIVE PARTNERACTIVE PARTNER
akaaka GENERALGENERAL PARTNER PARTNER must be at least 1 with must be at least 1 with
unlimited liabilityunlimited liabilityRESPONSIBLE FOR RESPONSIBLE FOR
OPERATIONSOPERATIONS
LIMITED PARTNERLIMITED PARTNER
PERSONAL LIABILITY LIMITED PERSONAL LIABILITY LIMITED TO VALUE OF INVESTMENT TO VALUE OF INVESTMENT (unlike general partner)(unlike general partner)
SILENT PARTNERSILENT PARTNER
INACTIVE INACTIVE Typically WITH FINANCIAL Typically WITH FINANCIAL
INTEREST only INTEREST only butbut USUALLY KNOWN TO BE USUALLY KNOWN TO BE
INVOLVED INVOLVED (i.e. identified)(i.e. identified)
SECRET PARTNERSECRET PARTNER
AN ACTIVE PARTNER WHO AN ACTIVE PARTNER WHO MAY NOT BE READILY MAY NOT BE READILY IDENTIFIABLE AS A PARTNERIDENTIFIABLE AS A PARTNER
DORMANT PARTNERDORMANT PARTNER
SILENT PARTNER SILENT PARTNER NOT GENERALLY KNOWN TO NOT GENERALLY KNOWN TO
BE INVOLVEDBE INVOLVED
Business NumbersBusiness Numbers
W-2W-210991099W-4W-4Tax Identification #Tax Identification #I-9 I-9 K-1K-1
LLC ???LLC ???
LLC – Limited Liability Co.LLC – Limited Liability Co.
newest & most dynamic a form of doing newest & most dynamic a form of doing business in worldbusiness in world
Best of both worldsBest of both worldscorporation & partnershipcorporation & partnership
LLC'sLLC's
must must notnot have more than 2 of the 4 characteristics have more than 2 of the 4 characteristics that define corporations:that define corporations:
limited liability to the extent of limited liability to the extent of assets assets
continuity of life continuity of life centralization of managementcentralization of managementfree transferability of ownership free transferability of ownership
interests. interests.
Disadvantages??Disadvantages??
must have limited life must have limited life
not to exceed 30 years.not to exceed 30 years.
no well developed body of case law or IRS no well developed body of case law or IRS rulingsrulings
Fees - examplesFees - examples
New JerseyNew JerseyProprietorship - noneProprietorship - nonePartnership – nonePartnership – noneLLC - annual registration fee $50LLC - annual registration fee $50Corporation – starts @ $500 Corporation – starts @ $500 (and goes up quickly)(and goes up quickly)
NJ TaxesNJ Taxes
Proprietorship – as personal incomeProprietorship – as personal incomePartnership – as personal income Partnership – as personal income
except IF more than 2 partners, except IF more than 2 partners, then then $150/partner$150/partner
Corporation – corporate tax + personal Corporation – corporate tax + personal income taxincome tax
LLC – taxed as partnership, LLC – taxed as partnership, unlessunless elect to elect to be taxed as corporation be taxed as corporation (Duhhh!)(Duhhh!)