stock exchange

A stock exchange is an entity that provides "trading" facilities for stock brokers and traders, to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.
To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only.
The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets is driven by various factors that, as in all free markets, affect the price of stocks (see stock valuation).
There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities.

Top 7 partnership tips

Business partnerships take on a variety of forms. They may be a long term formal legal commitment or a simple short term venture to test a market concept. The same principles apply in all cases.
Here are 7 tips to make sure the partnership starts strong and stays strong.

1. Start by creating a shared Vision & Mission
   
   As in any business, it's critical for the partners to define the Vision and Mission of the venture as the very first step. If all brains aren't going in the same direction in the same way, problems are bound to arise.
   
   The motives for each partner can be different. The overall objectives and methods, however, need to be the same.
   
   Tom chose to partner with Dominic because each saw the market need for a commercial kitchen facility. Tom was a commercial contractor who had worked on restaurants and catering facilities. Dominic was Manager of a cooking school and well connected within the food preparation industry. Their Vision was a 2,000 sq. ft. facility that would have 3 shifts of production, serve as a test kitchen for the cooking school and contract with other long term and project clients.
   
   Tip: Take time to discuss your company's Vision and Mission with your partners. Look for what energizes and motivates each of you about your business. Give it a purpose and define what the ideal business will look like. Put the joint Vision and Mission in writing and use it as the reference for everything else you do.
   
2. Make sure each partner's needs and expectations are addressed
   
   Each person in the partnership has his own reasons for being in the partnership. Sometimes people seek a partner for capital, sometimes for expertise, sometimes for connections. These are not always expressed, yet they remain as an underlying expectation. If the expectation isn't met, the relationship can become strained.
   
   Because each person's expertise, motivation and personality are different, it's important to have this discussion before anything is committed contractually.
   
   Because individual needs and expectations may change over time, a clear dissolution or modification plan needs to be in writing also,
   
   Gabe and Rosa had a wholesale distributorship that was limping along. Then Gabe became ill and couldn't work for several months. In the interim Rosa had to carry the entire business alone. While she was able to do so, when Gabe came back he didn't have the energy or motivation to pick up his role again. Rosa wasn't prepared to carry it alone long term. Until they sat down together to discuss expectations, each was feeling let down and soon the bad feelings took over.
   
   Tip: Find out what your partner expects from you in the partnership. Share your expectations as well. Have a plan for when personal or business circumstances or interests change so, when needed, expectations can be readdressed.
   
3. Identify and utilize the strengths of each partner
   
   Because partners join forces for a variety of reasons and expectations, sometimes the strengths of each individual may be overlooked. The most obvious strengths will probably be recognized; however, underlying strengths, when brought out can often make a big difference in long term motivation, commitment and success.
   
   Ted and Rudy's restaurant had reached a plateau after two years in business. Ted was in charge of the kitchen, Rudy the business end. With the help of a coach, Rudy realized that one of his personal strengths was his artistic ability and interest. When he decided to connect his art with the business, the average sales were up 35% the first month and another 25% the following month. He used his restaurant as a gallery for himself and guest artists. The restaurant frequently received mention in the art media and related calendars. And Ted was inspired to create "artistic" dishes.
   
   Tip: Bringing out and utilizing the strengths of the individuals within the partnership will add to the motivation, the energy and the odds of long-term success. Make note of your personal strengths and ask your partner to do the same. Then sit together and discuss how you can apply these to the business.
   
4. Support the partnership's limitations
   
   In an effort to save money, little things often pile up in areas where partners have neither expertise nor interest. Over time, these can literally sink your business. Limitations can be in any area: strategy, product/service development, marketing and sales, personnel and operations management, financial management and administrative. Wherever they are it's important to identify them as early as possible and have a plan to manage them so they don't get out of hand.
   
   Amanda and Tracy opened an organic spa where all products used and sold were organic. They also offered private consultations for personal wellness. Business was great, but they didn't know how to manage their cash flow. They soon found themselves in a cash crunch with debt that was continuing to build. The answer, of course, is that they needed support with business and financial management. On suggestion from an advisor they hired a business manager who was able to provide support in their area of weakness.
   
   Tip: Look at the areas that are problems for you. Chances are these are areas that could benefit from some extra support. If you think you can't afford it...think again. You can't afford not to support limitations. These gaps are where the value of the business slips away little by little. Don't let it happen to your business.
   
5. Set company and individual goals
   
   The ideal way for partners to approach goals is to start with goals for the company, then each create goals for themselves. Individual goals should support the company goals. Goals should measure and support expectations. Writing these is especially important for partners.
   
   Theresa and Irena were on a good track with their two year old specialty marketing business. They verbally set company goals, but didn't consider what each would be accountable for in reaching these goals. When they didn't make their goals they blamed each other and things turned ugly.
   
   Tip: Review and update your company goals together with your partners. Then get each partner to set individual goals that support the company goals in their area of expertise. Put all these in writing and get each to commit to their goals. Then at the end of the period there is no question about who's accountable for what.
   
6. Handle disagreements, disappointments and frustrations early.
   
   As in any type of partnership, disagreements will happen. Handling them effectively is the key to keeping the relationship on an even keel and the partnership in good order. Don't let bad feelings build and fester over time. Make it a rule that each can approach the other when something needs to be addressed.
   
   When Art became sidetracked with personal issues and was spending much less time in the business, the relationship became strained. Charlotte didn't want to upset things by challenging how Art was spending his time. She didn't say anything directly to Art, but made negative remarks about how she was "carrying" the business. Charlotte became disenchanted with the business and allowed it to get into bad shape before she finally called for outside help.
   
   Tip: Sometimes it's difficult to approach a partner, especially if it's a long standing relationship that has deteriorated. A regularly scheduled sit down together is definitely a good idea. Once a week is needed in some situations, but minimally once a month allows everyone to come with their agenda. It's always best to talk about what you'd like to see for the business and be positive. Present a plan for change as you see it. That gives everyone something to work with and respond to.
   
7. Define job roles for each partner, including accountability
   
   Do you and your partner have written job roles? If not you may be operating under false assumptions. Job roles look a lot like job descriptions in that they carry the connotation: "responsible for" with a list of tasks and outcomes. Lack of clarity around job roles is a major source of frustration and disappointment in many partnerships.
   
   Pamela knew she was the primary sales person for their insurance business. But she expected her partner, Charles, to bring in some of the business, even though that had not been discussed in depth or clarified in writing. When she saw he was handling personal business during regular business hours she became furious. His mental picture of his role was obviously quite different from Pamela's. Discussion and clarification of each job role was definitely in order.
   
   Tip: Clearly define the tasks you will perform and have your partner do the same. From this you can each be accountable to yourselves, to each other and to the business. Where there are uncovered tasks, contract for or hire a specialist. The objective is to make sure all jobs are covered and accountability has been assigned and acknowledged.

Marian Banker, MBA, is President of Prime Strategies, offering individual, group and virtual programs designed to help clients take command of their business. Marian’s mission is to help small business owners be the leader of a strong and profitable business.

Partner ship basic

Partnership Basics

Learn more about the simplest business structure for companies withmore than one owner.

By definition, a partnership is a business with more than one owner that has not filed papers with the state to become a corporation or LLC (limited liability company). There are two basic types of partnerships: general partnerships and limited partnerships. This article discusses general partnerships, the more common structure in which every partner has a hand in managing the business.
The partnership is the simplest and least expensive co-owned business structure to create and maintain. However, there are a few important facts you should know before you begin.

Personal Liability for All Owners

First, partners are personally liable for all business debts and obligations, including court judgments. This means that if the business itself can't pay a creditor, such as a supplier, lender, or landlord, the creditor can legally come after any partner's house, car, or other possessions.
There are a few exceptions to this personal liability. Some of the partners can have limited personal liability if the partnership is set up as a limited partnership. This is a partnership in which only the general partner, who runs the business, has personal liability, while the limited partners, who are basically passive investors, can lose no more than their stake in the partnership. Also, some states allow special limited liability partnerships (LLPs). More commonly, though, businesspeople who are particularly concerned about personal liability choose to incorporate their business or operate as a limited liability company (LLC). For more information, see Nolo's articles on corporations and limited liability companies.

Joint Authority

In addition, any individual partner can usually bind the whole business to a contract or other business deal. For instance, if your partner signs a year-long contract with a supplier to buy inventory at a price your business can't afford, you can be held personally responsible for the money owed under the contract.
There are just a few limits on a partner's ability to commit the partnership to a deal -- for instance, one partner can't bind the partnership to a sale of all of the partnership's assets. But generally, unless an outsider has reason to know of any limits the partners have placed on each other's authority in their partnership agreement, any partner can bind the others to a deal.

Joint Liability

Each individual partner can be sued for -- and required to pay -- the full amount of any business debt. If this happens, an individual partner's only recourse may be to sue the other partners for their shares of the debt.
Because of this combination of personal liability for all partnership debt and the authority of each partner to bind the partnership, it's critical that you trust the people with whom you start your business.
 

Partnership Taxes

A partnership is not a separate tax entity from its owners; instead, it's what the IRS calls a "pass-through entity." This means the partnership itself does not pay any income taxes on profits. Business income simply "passes through" the business to the partners, who report their share of profits (or losses) on their individual income tax returns. In addition, each partner must make quarterly estimated tax payments to the IRS each year.
While the partnership itself doesn't pay taxes, it must file IRS Form 1065, an informational return, each year. This form sets out each partner's share of the partnership profits (or losses), which the IRS reviews to make sure the partners are reporting their income correctly.
For more information on reporting and paying partnership taxes, see How Partnerships Are Taxed.

Creating a Partnership

You don't have to file any paperwork to establish an ordinary partnership -- just agreeing to go into business with another person will get you started.
Of course, partnerships must meet the same local registration requirements as any new business. Most cities and counties require businesses to register with them and pay at least a minimum tax. You may also have to obtain an employer identification number from the IRS, a seller's license from your state, and a zoning permit from your local planning board.
In addition, your partnership may have to register a fictitious or assumed business name. If your business name doesn't contain all of the partners' last names (for instance, you want to use "London Landscapes" instead of "Harper & Reed Landscapes"), you usually must register that name -- known as a fictitious or assumed business name -- with your county clerk. For more information on fictitious business names, see Registering Your Business Name.
While the owners of a partnership are not legally required to have a written partnership agreement, it makes good sense to put the details of ownership, including the partners' rights and responsibilities and their share of profits, into a written agreement. For more about why partnership agreements are so important, read Creating a Partnership Agreement.

Ending a Partnership

One disadvantage of partnerships is that when one partner wants to leave the company, the partnership generally dissolves. In that case, the partners must fulfill any remaining business obligations, pay off all debts, and divide any assets and profits among themselves.
If you want to prevent this kind of ending for your business, you should create a buy-sell agreement, or buyout agreement, which can be included as part of your partnership agreement. A buy-sell/buyout agreement helps partners decide and plan for what will happen when one partner retires, dies, becomes disabled, or leaves the partnership to pursue other interests. For example, such an agreement might allow the partners to buy out a departing partner's interest, so business can continue as usual. For more information, see Plan Ahead for Changes in Partnership Ownership.
For more information on the legal and practical issues involved in forming a business partnership, see Form a Partnership: The Complete Legal Guide, by Ralph Warner and Denis Clifford (Nolo). Or, to create a "business prenup" that will protect a business if someone leaves, seeBusiness Buyout Agreements: A Step-by-Step Guide for Co-Owners, by Bethany Laurence and Anthony Mancuso (Nolo).

Bank loan

When choosing a personal loan it is important to note that often small but significant differences exist between the loans on offer, and as a result some types will be more suited to your individual circumstances than others. These differences may include flexibility, repayment terms, insurances offered and how established the lender is.

It can be difficult to remain objective when you are in need of money, but if you fail to consider the risks associated with borrowing you may end up regretting a commitment to a high interest rate or demanding repayment schedule. When you have a clear idea of the advantages and disadvantages of loans in general, comparing the loans on offer will prove easier. Consider the disadvantages you are prepared to accept, such as higher interest over a shorter repayment period, if you are keen to pay the loan off quickly.


Advantages of a Loan
Loans are a relatively fast way to obtain funds for a special purchase or project, and even large amounts can be borrowed for almost any purpose. They are suitable for expensive purchases that require immediate payment, allowing you to spread the cost of the purchase and manage your short term finances more easily, especially if your loan has a fixed interest rate (see Interest Rates).

There is a high level of competition amongst lenders, which usually makes it possible for you to negotiate a cheaper interest rate than the one which you are initially quoted. It may also be worth investigating whether there is a specialist lender who can provide loans tailored to your specific purpose, for example buying a car, since they may offer you a cheaper or more suitable loan. Personal loans are often more popular than other sources of finance such as credit cards and overdrafts, because the amount you can borrow is typically greater.


Disadvantages of a Loan
Loans constitute a long-term financial agreement and used in the right way can be a useful financial tool. However, anyone considering applying for a loan should analyse their personal finances carefully, and calculate exactly how much they can afford to borrow based on how much money they can spend on repayments each month, once their other financial committments have been honoured.

If you cannot afford to make repayments when they are due, you may face a penalty. If you have chosen to take out a secured loan, you may even lose your home. For this reason it is important to read all the 'small print' of any loan contract to see what penalties could be levied, and consider whether or not you should be applying for a loan at all. Furthermore, if you default on the loan, your credit rating and ability to access credit in the future will be detrimentally affected, see Credit Scoring.

On the other hand, you could also be penalised for making a large lump sum repayment to pay off your loan sooner than agreed. Although most loan companies will allow you to do this, they may charge you an early repayment fee.

For anyone wishing to borrow only a small amount that they aim to pay back within a short period of time, a credit card may be a more suitable solution because the balance can usually be paid off in full at any time without incurring early repayment fees. Similarly, an overdraft may be a more effective option for those who require a relatively small amount of credit in an emergency. However, interest charges for overdrafts and credit cards are usually much higher than for personal loans, so it is inadvisable to use them for long-term borrowing.

sole propritoship

The sole proprietorship is the oldest, most common, and simplest form of business organization. A sole proprietorship is a business entity owned and managed by one person. The sole proprietorship can be organized very informally, is not subject to much federal or state regulation, and is relatively simple to manage and control.

The prevalent characteristic of a sole proprietorship is that the owner is inseparable from the business. Because they are the same entity, the owner of a sole proprietorship has complete control over the business, its operations, and is financially and legally responsible for all debts and legal actions against the business. Another aspect of the "same entity" aspect is that taxes on a sole proprietorship are determined at the personal income tax rate of the owner. In other words, a sole proprietorship does not pay taxes separately from the owner.

A sole proprietorship is a good business organization for an individual starting a business that will remain small, does not have great exposure to liability, and does not justify the expenses of incorporating and ongoing corporate formalities.

CHOOSING AN APPROPRIATE FORM OF BUSINESS REQUIRES CAREFUL CONSIDERATION OF ISSUES COVERED IN THIS GUIDE AS WELL AS OTHERS NOT DISCUSSED. THIS GUIDE ONLY PROVIDES BASIC INFORMATION ON SOME OF THE LEGAL AND PRACTICAL ISSUES TO CONSIDER WHEN SETTING UP A BUSINESS. IT IS MERELY DESIGNED TO ASSIST PROSPECTIVE ENTREPRENEURS IN THE EARLIEST STAGES OF BUSINESS DEVELOPMENT. THE GUIDE IS NOT A SUBSTITUTE FOR PROFESSIONAL ADVICE. PERSONS CONTEMPLATING STARTING A BUSINESS ARE STRONGLY ENCOURAGED TO CONSULT LEGAL, FINANCIAL AND TAX ADVISERS. FIND AN ATTORNEY THROUGH THE 

Sole Proprietorship - Points to Consider

• Easiest type of business organization to establish. There are no formal requirements for starting a sole proprietorship
• Decision making is in direct hands of owner.
• All profits and losses of the business are reported directly to the owner's income tax return.
• The startup costs for a sole proprietorship are minimal.
• Owner has unlimited liability. Both the business and personal assets of the sole proprietor are subject to the claims of creditors.
• Because a sole proprietorship is not a separate legal entity, it usually terminates when the owner becomes disabled, retires, or dies. As a result, the sole proprietorship lacks continuity and does not have perpetual existence like other business organizations.
• It is difficult for a sole proprietorship to raise capital. Financial resources are generally limited to the owner's funds and any loans outsiders are willing to provide.
• Owner could spend unlimited amount of time responding to business needs.

Sole Proprietorship - Procedural Aspects

• There are no Iowa statutes governing the formation of a sole proprietorship.

Sole Proprietorship - Key Attributes

• Creation (minimum requirements) - No Formalities for creating a sole proprietorship.
• Profits / Losses / Distributions - Owner may use all profits and losses for business.
• Liability - Owner faces unlimited personal liability.
• Capital / Financing - All capital obtained from owner or through loans based on owner's creditworthiness.
• Duration - Usually no continuity upon disability, retirement or death of owner.
• Transfer of Ownership - Assets may be sold in entirety or in part.
• Management and Control - Owner manages and controls the company.
• Taxation - The business does not file or pay taxes.
• Reporting Requirements - None.
• Fees - None.