Welcome to Demo Teaching

Role assumption: Participants here would play a

role as “freshman” students in my class
Contents:
-Relating to Chapter 5 of “Introduction to Business Administration” Course
- Introducing to 2 main concepts : Sole Proprietorship and Partnership
Learning Goals
-Compare the advantages and disadvantages of two forms
-Describe the differences between general and limited partners

INTRODUCTION TO BUSINESS ADMINISTRATION 1

Chapter 5
How to Form a Business

INTRODUCTION TO BUSINESS ADMINISTRATION

Pic.1 Pic.2
I’m Tư

I’m
Ruộng
*

Pic.3

INTRODUCTION TO BUSINESS ADMINISTRATION 3

 Your View
Why we have different forms of business
ownership?

Issues of Money : I have ideas but have not enough money

Issues of Skills , experience
Issues of time : have money, idea, have no time to in charge much , but
don’t want to miss opportunities

INTRODUCTION TO BUSINESS ADMINISTRATION 4

 SOLE PROPRIETORSHIP
A business owned, and usually managed,
LG1by
one person.

Source : Google

INTRODUCTION TO BUSINESS ADMINISTRATION 5

 SOLE PROPRIETORSHIP
Ease of starting and ending the business

Pride of ownership

Being your own boss

Advantages

Retention of company
Leaving a legacy profit
No special taxes

INTRODUCTION TO BUSINESS ADMINISTRATION 6

 SOLE PROPRIETORSHIP

Limited financial resources

Unlimited Liability Management difficulties

Disadvantages Limited growth

Overwhelming time commitment

Limited life span
Few fringe benefits

INTRODUCTION TO BUSINESS ADMINISTRATION 7

PARTNERSHIP
Two or more people legally agree to become
co-owners of a business.

Source : Google

INTRODUCTION TO BUSINESS ADMINISTRATION 8

 PARTNERSHIP

• General Partnership -- All owners share in

operating the business and in assuming liability for
the business’s debts.

• Limited Partnership -- A partnership with one

or more general partners and one or more
limited partners.
• “Limited partner” who have limited liability for losses
beyond his or her investment

INTRODUCTION TO BUSINESS ADMINISTRATION 9

 PARTNERSHIP

• More financial resources • Shared management and

pooled skills and
knowledge

Advantages

• No special taxes • Longer survival

INTRODUCTION TO BUSINESS ADMINISTRATION 10

PARTNERSHIP

Unlimited Liability
Division of profits

Disadvantages

Difficult to terminate Disagreements among partners

INTRODUCTION TO BUSINESS ADMINISTRATION 11

 In Vietnam
Percentage in structure of business ownership

% 2010 2012 2013 2014 2015

Sole 17.18 13.88 13.18 12.23 10.79
Proprietorship

Partnership 0.03 0.09 0.13 0.13 0.13

Profit rate by sole proprietorship and Partnership

% 2010 2012 2013 2014 2015
Sole 0.74 0.74 0.67 0.68 0.88
Proprietorship

Partnership 12.9 1.01 9.35 8.4 7.1

Source : GSO

INTRODUCTION TO BUSINESS ADMINISTRATION 12

 CORPORATIONS
A legal entity with authority to act and have
liability apart from its owners.

INTRODUCTION TO BUSINESS ADMINISTRATION 13

 CORPORATIONS
Advantages Disadvantages

• Limited liability • Initial cost

• Ability to raise more money for • Extensive paperwork
investment
• Double taxation
• Size
• Two tax returns
• Perpetual life
• Size
• Ease of ownership change
• Difficulty of termination
• Ease of attracting talented
• Possible conflict with
employees
stockholders and board of
• Separation of ownership from directors
management

INTRODUCTION TO BUSINESS ADMINISTRATION 14

Compare and Contrast Sole Partnership Corporation
Proprietorship
Protecting against Difficult Difficult Easy
liability for debts

Raising money Difficult Medium Easy

Ownership Difficult Difficult Easy

transfer
Preserving Difficult Difficult Easy
continuity
Government Few Few Many
Regulations
Formation Easy Easy Difficult
Income taxation Once Once Twice

INTRODUCTION TO BUSINESS ADMINISTRATION 15

 Your turn
Lets consider Vietnam market , Can you match
these forms to the equivalences.

1. Sole Proprietorship means

A. Doanh Nghiệp Tư Nhân
B. Công ty hợp danh
C. Công ty cổ phần

2. Limited Partnership means

A. Doanh nghiệp Tư Nhân
B. Công ty hợp danh
C. Công ty trách nhiệm hữu hạn
D. Doanh nghiệp Hợp Danh trách nhiệm hữu hạn
INTRODUCTION TO BUSINESS ADMINISTRATION 16
 Your turn
Consider Vietnam Market , Can you match these
forms to the equivalences.

3. Corporations means
A. Doanh Nghiệp Tư Nhân
B. Công ty hợp doanh
C. Công ty cổ phần
D. Công ty TNHH

INTRODUCTION TO BUSINESS ADMINISTRATION 17

 Answer
Lets consider Vietnam market , Can you match
these forms to the equivalences.

1. Sole Proprietorship means

A. Doanh Nghiệp Tư Nhân
B. Công ty hợp danh
C. Công ty cổ phần

2. Limited Partnership means

A. Doanh nghiệp Tư Nhân
B. Công ty hợp danh
C. Công ty trách nhiệm hữu hạn
D. Doanh nghiệp Hợp Danh trách nhiệm hữu hạn

INTRODUCTION TO BUSINESS ADMINISTRATION 18

 Your turn
Consider Vietnam Market , Can you match these
forms to the equivalences.

3. Corporations means
A. Doanh Nghiệp Tư Nhân
B. Công ty hợp doanh
C. Công ty cổ phần
D. Công ty TNHH

INTRODUCTION TO BUSINESS ADMINISTRATION 19

Your turns

How to find the best partner?

INTRODUCTION TO BUSINESS ADMINISTRATION 20

 PICK YOUR PARTNER WISELY
(Spotlight on Small Business)

There is no such thing as a perfect partner but

ask these questions when you try to find your
best match:
• Do you share the same goals?
• Do you share the same vision for the company?
• What skills does he/she have? Are yours the same?
• What can he/she bring to the business?
• What type of decision maker is he/she?
• Do you trust each other?
• How does he/she problem solve?

INTRODUCTION TO BUSINESS ADMINISTRATION 21

Appendix

INTRODUCTION TO BUSINESS ADMINISTRATION 22

 Business Ownership in Vietnam (%)
2010 2012 2013 2014 2015
Sole 17.18 13.88 13.18 12.23 10.79
Proprietorship

Partnership 0.03 0.09 0.13 0.13 0.13

Corporation 20.32 21.64 21.29 20.77 20.70
Limited 58.7 60.87 61.80 63.37 65.04
Company
Others

INTRODUCTION TO BUSINESS ADMINISTRATION 23