Part 2 Flashcards
legal forms for private companies
Major forms:
Sole Proprietorships (Einzelunternehmen)
Partnerships (Personengesellschaften)
Corporations (Kapitalgesellschaften)
Special forms:
Mixture between Partnerships / Corporations
Cooperatives (Genossenschaften)
Private Foundation (Stiftung des privaten Rechts)
The Sole Proprietorship / Einzelunternehmen
Business owned and usually operated by one person („Kaufmann“) who is responsible for all of its debts
Not a legal entity
Overview of Partnerships / Personengesellschaften
Business with two or more owners who share in both the operation of the firm and the financial responsibilities
Not a legal entity
General partner ( KG)
Komplementär): with unlimited liability
Only general partners are authorized to manage the company.
Limited partner ( KG)
(Kommanditist), liable to extent of his investment
Limited partners have only control right (Special modified rules can be agreed by contract)
GmbH & Co. KG
Mixture of Partnership (KG) and Corporation (GmbH),
a special form of limited partnership / Kommanditgesellschaft (KG)
Without own legal personality:
– reine Regiebetriebe (ancillary municipal enterprise, e.g.
garbage disposal, public slaughterhouses, forestry …)
– verselbständigte Regiebetriebe (with own decision rights, e.g.
municipal utilities, public transport service, like VAG Nürnberg)
With own legal personality:
Körperschaft des öffentlichen Rechts (corporation of
public law, founded by governmental decision, based
upon members, e.g. social insurance, universities)
– Anstalt des öffentlichen Rechts (institution of public law, no
members, user oriented, e.g. hospitals, public TV stations)
– Stiftung des öffentlichen Rechts (Foundation of public law, e.g.
Studienstiftung des deutschen Volkes, Stiftung Preußischer
Kulturbesitz)
What is the best location for setting up a new business ?
Major factor categories for location selection
– Market orientation
– Operation orientation
– Know how orientation
– Governmental conditions
Market Orientation
Market size and future growth potential
* Population structure and purchasing power
* Competition intensity
* Publicity and image of own company
* Availability of sales channels and partners
* Logistic infrastructure for distribution
Operation Orientation
- Availability of employees
– Education and qualification
– Cost level in labour market - Appropriate public infrastructure
– Transportation system (road, railway, airport …)
– Energy supply and its cost
– Availability of land and building
– Quality of life in the location (schools, leisure…) - Availability of supplier base
– Professionalism and quality of supplier
– Cost level of raw materials & component supplies
Know How / Information Orientation
- Innovative business environment
- Better access to advanced technologies
- Availability of highly qualified specialists
- Co-operation possibility with scientific institutions and organisations
- Governmental relationship (Lobbying)
- Involvement in relevant industrial associations and standardization institutions
Governmental Conditions
- Economic system
- Administration efficiency
- Taxation
- Customs, Tariffs & Non-Tariff Barriers
- Environmental requirements
- State assistance (subsidies)
- Regional specific promotion programs
Forms of collaboration.
According to Direction explain horizontal, vertical and conglomerate
Horizontal - with companies in the same industry (e.g. for reaching synergy effect)
- Vertical - with companies along the value chain (e.g. customers / suppliers)
- Conglomerate - with companies from other industries or without obviously relation to own core competence
Forms of collaboration.
According to Intensity
- Co-operation - only exclusion of parts of the company to a new (common) organisation for a limited time, e.g. Joint Venture, Strategic Alliance
-> Only loss of a part of economic autonomy - Combination under central control: full integration into a group company (concern)
-> Merger & Acquisition (M&A)
->Loss of economic autonomy
