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GST201: Entrepreneurship and Product Development
Lecture One: a – c of the Course Outline
a
...

Quick Clarifications…
❖ Essentially, entrepreneurs coordinates the other factors of production … e
...
Aliko
Dangote as an entrepreneur – Cement; Consumables like sugar, spaghetti, etc and now
into refinery…
❖ Entrepreneurship is more of ideology and not necessarily skills acquisition, although
skills acquisition may enhance the activities of the entrepreneurs, most especially at a
cottage or small/medium scale levels…
❖ Whereas all entrepreneurs are considered as businessmen, not all businessmen are
entrepreneurs…
❖ One of the things that differentiates an average businessman from an entrepreneur is
the aspect of physical and direct involvement in the day to day activities and/or the
conversion processes…
❖ Being entrepreneurial isn't just about starting companies
...

b
...
Research shows that an entrepreneurial mindset is valued by employers, boosts
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educational attainment and performance, and is crucial for creating new businesses (nfte,
2021)
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2) Motivation
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4) Be happy about making mistakes
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6) Respond to changes
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c
...

Basic Issues in Entrepreneurial Mindset?
McCoskey-Reisert (2021) observed the main characteristics obtained in entrepreneurial
mindset thus:
1
...
As setbacks happen, entrepreneurs
seek solutions instead of focusing on the negative
...
However, the word, FAILURE is taken to
mean First Attempt In Learning; Use Relevant Experience(s) (Adefiranye, 2020)
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Focus
Entrepreneurs rarely allow distractions to take their minds off matters at hand
...

3
...
“Setting goals and keeping them in mind, visualizing
success, and exercise is also good to improve thought processes and gain clarity”
...
Decisiveness
When you’re the head of an entrepreneurial venture, everything falls on you
...

5
...
The need for
independence is one of the reasons why a person who has already enjoyed a long career
in business may break from their company to strike out on their own
...
Authenticity
There is a genuineness to entrepreneurs; they’re not phonies
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7
...
They’re thinking about their ideas 24/7,
and have no qualms about getting down to work at any time of the day or night
...

8
...
They have ideas, but they recognize that much more information
is needed to bring those ideas to life
...
Creativity
The ability to think outside the box and improvise when necessary is an essential element
of the entrepreneurial mindset
...


3

GST201: Entrepreneurship and Product Development
Lecture Two: d – f of the Course Outline
d
...

Entrepreneurial Ability:
Entrepreneurship has been said to be an ‘individual's ability to turn ideas into action’
...
It is seen as vital to promoting innovation, competitiveness
and economic growth
...
It is a very key issue in management for the fact that it charts a
course of action
...
However, it should be
mentioned that plans are executed by decisions and relevant actions
...
Managing is a social process
...
People in this regard refers to: workers, customers/clients,
suppliers, etc
...

Opportunity; willingness; skills; and roles
Entrepreneurial opportunities are usually understood/placed in situations where products
and services can be sold at a price greater than the cost of their production
...
To
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make this possible, an entrepreneur is expected to acquire as much knowledge as possible
about the industry in order to find new opportunities
...
Put in simple terms,
entrepreneurs observe technological, economic, or social trends to discover opportunities
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Without action, you cannot be a good entrepreneur
...
This,
willingness, is one of the essential characteristics of a successful entrepreneur
...
To be a successful entrepreneur, you should have
willingness towards the following: Passion; Resourcefulness; Improvise; Listen to
others; and Strong determination to succeed
...
Because
entrepreneurial skills can be applied to many different job roles and industries,
developing your entrepreneurial skills can mean developing several types of skill sets
...
To build and maintain successful project teams you might need to
improve your leadership and communication skills (Indeed Career Guide, 2021)
...
After discovering an opportunity, an entrepreneur
is expected to turn the discovered opportunity into a benefit and reality by bringing all
relevant and necessary resources (human and other resources) together
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2
...

4
...


Find opportunities in your own community
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Look for ideas that get other people involved
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Give back through meaningful philanthropical work
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Consumer segmentation
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Purchase situation analysis
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Direct competition analysis
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Indirect competition analysis
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Analysis of complementary products and services
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Analysis of other industries
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Foreign markets analysis
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Environment analysis
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2) Dropshipping
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4) Consulting
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6) Freelance business
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8) Consultancy
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Listen to your potential clients and past leads
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2
...

3
...

4
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Skills:
The Most Important Skills needed by Entrepreneurs
1
...
Great entrepreneurs are tasked to discover new problems, reveal potential
niche opportunities, refactor their original business process, and innovate
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Time management
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Strategic thinking
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Efficiency
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6
...

8
...

Communication
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Finance
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Teamwork and leadership skills
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Communication and listening
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Customer service skills
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Financial skills
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Analytical and problem-solving skills
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Critical thinking skills
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Strategic thinking and planning skills
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ii
...
New Venture opportunities and Ideas
New Ventures is a global program that provides services for the development of
small and medium enterprises (SMEs) whose main goal is to generate a positive
environmental or social change within their own communities
...
Existing businesses may remain confined to existing markets
and may hit a limit in terms of income
...

Five (5) components of the process of new venture creation
Entrepreneurial process can be broken into five phases:
1
...
Opportunity evaluation,
3
...
Company formation/launch, and,
5
...


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f
...
New venture development involves
various activities in creating a business that can be competitive in the market (Morse and
Mitchell, 2006)
...

The development of new ventures has been an issue of keen interest to the society
...

How to venture into a new business (in general)
1
...
Before diving into the details of your
potential business, it's best to take stock of yourself and your situation
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Refine your idea
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Conduct market research
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Write your business plan
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Make your business legal
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Fund your business
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Pick your business location
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Decide to go into business
2
...
Select a product or services
4
...
Credit lending opportunities
6
...
Conduct a market research and feasibility studies
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8
...
Select a location
10
...
Prepare a production plan
12
...

13
...

14
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New Business Start-up Worksheet
Element
Focal issues
Product

Customer

Competition

•
•
•
•
•
•
•
•
•
•
•

What customer need will the business satisfy?
How can our product be unique?
Who
are
our
customers
and
what
their profiles?
Where do they live/work/play?
What are their buying habits?
What are their needs?
Who/where is/are the competitor(s)?
What are their strength and weaknesses?
How might they respond to us?
Who/where are our suppliers?
What are their business practices?

•

What relationship can we expect?

•
•
•
•
•
•
•
•
•
•

Where are our customers / competitors / suppliers?
What are the location costs?
What are the legal limitations to location?
Should the business rent/own/refurbish facilities?
Should the business rent/lease/purchase equipment?
What are the maintenance costs?
Are they available?
Their training?
What are their costs?
International issues?

Suppliers

Location

Physical facilities/Equipment

Human Resources
...


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are

GST201: Entrepreneurship and Product Development
Lecture Two: (g) – (i) of the Course Outline
g
...

Firm growth, according to Nason and Wiklund (2018), is the increase in a firm's
performance or size over time
...

Determinants of growth and development
Growth and development are affected by many factors
...
As an entrepreneur,
you need to focus on each of these if you intend to grow your enterprise continually
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2) Smart Adoption of Technology
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4) Social Responsibility
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Why do new ventures fail?
The most common reasons small businesses fail include:
1) Lack of capital or funding,
2) Inadequate management team,
3) Faulty infrastructure or business model,
4) Unsuccessful marketing initiatives
...
Of the reasons for this kind of situation are:
a)
b)
c)
d)
e)

Failure to market (more especially take the recent system of online marketing)
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Failure to leverage future growth
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Failure to track and measure your marketing efforts
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2) Failure to understand customer behavior today
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4) Unsustainable growth
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6) Trying to do it all
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8) Refusal to pivot
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Entrepreneurial Functions and Hazards
An entrepreneur frequently has to wear many hats
...

Specifically, the two main functions of entrepreneurs are first, taking the risk of
developing new products or services and, second, successfully bringing new products
and services into the marketplace
...


Functions of an Entrepreneur
Researchers such as Peter Kilby, Albert Shapiro, John Burch, and others have prescribed
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different functions of entrepreneurship or entrepreneur from which we can derive distinct
but common functions of entrepreneurship
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Taking Initiative
2
...
Identifying Opportunities and Prospects
4
...
Decision Making
6
...
Innovation
8
...
Social Responsibility
10
...
Experience Sharing
12
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Balanced Economic Development
These are explained below:
1
...
This unique function of entrepreneurship provides our civilization with a wide
variety of products, ways of actions, production techniques, etc
...

2
...
The resources include human and nonhuman resources
...
Entrepreneurship,
thus, is the taping tool for assuming indigenous skills and resources for the productive
purpose
...
Identifying Opportunities and Prospects
Entrepreneurship searches those activities of value that have an economic and social
contribution
...

4
...
For innovative actions in the field of
production technology for new products in a volatile market and new raw materials used
in production
...

5
...
Entrepreneurship has to decide upon equipment to be used quality,
price and its variation, deficiency, capital structure, the feasibility of the project,
organizational structure, philosophy of management, etc
...

6
...
This function of entrepreneurship involves identifying appropriate technology
with market potentials and adapts it into the local environment
...
This
entrepreneurial function virtually makes the world united in terms of homogeneous
technology
...
Innovation
Entrepreneurship innovates a new production process or technology, market, sources of
new materials, management, strategy or technique, investment opportunity, etc
...
Under
the context of the changing environment, the entrepreneur locates the most feasible
opportunity for the venture as well as improved or distinct technology that gives
competitive advantages or a new opportunity to prosperity
...
Entrepreneurship through
innovation creates innovative products or operations for human society
...
Fostering Autonomy
Entrepreneurship is an exposure of creative faculty that provides personal satisfaction and
independence
...
Thus, entrepreneurship Fosters autonomy to advent something new of
value by the application of devoted efforts and time
...
Social Responsibility
Entrepreneurship with its innovative technology somehow promotes human efforts
...
It also
motivates new entrepreneurs and attracts them to engage into an entrepreneurial venture
...
Therefore, entrepreneurship performs social responsibility that protects the
welfare, benefit and economic gain of the society
...

10
...
The government, as well as the persons’ who will be
subject to entrepreneurship, would be convinced through public relations to accept and to
allow the entrepreneur to execute an entrepreneurial venture
...
Failure is costly and therefore, public relation is a significant function of
entrepreneurship
...
Experience Sharing
Entrepreneurship may spread in society through publishing and sharing its success
stories
...

12
...
The roles are interpersonal roles that consist of a figurehead role, leadership role,
and liaison role; informational roles that include recipient role, disseminator role, and the
spokesperson role; decisional roles that consist of an entrepreneurial role, disturbancehandler role, resource allocator role, and the negotiator role
...

13
...
Every country tries to ensure such a situation that makes
industrialization throughout the country possible
...


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Hazards:
In all these, an average entrepreneur must be fully prepared for the hazards of being an
entrepreneur
...
Premature expansion
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Legal entanglements
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Partnerships
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Becoming consultants
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Trade system (cash consciousness or liquidity)
...
The business model (including Forms of Business Organizations)
A business model is a conceptual structure that supports the viability of the business and
explains who the business serves, what it offers, how it offers it, and how it achieves its
goals
...
It identifies the products or services the business plans to sell, its identified target
market, and any anticipated expenses
...
A
primary component of the business model is the value proposition
...

Business models are important for both new and established businesses
...
Established businesses should regularly update their business plans or they'll fail to

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anticipate trends and challenges ahead
...

A new enterprise's business model should also cover projected startup costs and financing
sources, the target customer base for the business, marketing strategy, a review of the
competition, and projections of revenues and expenses
...
For
example, the business model for an advertising business may identify benefits from an
arrangement for referrals to and from a printing company
...
These key components
are customers, value proposition, operating model, and revenue model
...
Over time, many businesses revise their business
models from time to time to reflect changing business environments and market
demands
...

b) Models generally include information like products or services the business plans to
sell, target markets, and any anticipated expenses
...

d) When evaluating a business model as an investor, ask whether the idea makes sense
and whether the numbers add up
...


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1
...

B2C businesses sell to their end-user
...
Anything you buy in an
online store as a consumer — think wardrobe, household supplies, entertainment — is
done as part of a B2C transaction
...
Think about it: it’s much easier for you to decide on a new pair of tennis
shoes than for your company to vet and purchase a new email service provider or food
caterer
...
B2C doesn’t only include products, but
services as well
...
For example, using an app like Lawn Guru allows consumers to
easily connect with local lawn mowing services, garden and patio specialists, or snow
removal experts
...
B2B – Business to business
...

Sometimes the buyer is the end user, but often the buyer resells to the consumer
...
Recent B2B innovators have made a place for themselves by
replacing catalogs and order sheets with ecommerce storefronts and improved targeting
in niche markets
...
As younger generations enter the age of making business
transactions, B2B selling in the online space is becoming more important
...
C2B – Consumer to business
...
In this
ecommerce model, a site might allow customers to post the work they want to be
completed and have businesses bid for the opportunity
...
Elance (now Upwork) was an early innovator in this
model by helping businesses hire freelancers
...
This approach gives consumers the power to
name their price or have businesses directly compete to meet their needs
...

4
...

A C2C business — also called an online marketplace — connects consumers to exchange
goods and services and typically make their money by charging transaction or listing
fees
...
C2C businesses benefit from self-propelled growth by motivated buyers and
sellers, but face a key challenge in quality control and technology maintenance
...
Counting
costs to the introduction of a product is not enough
...
One way analysts and investors evaluate
the success of a business model is by looking at the company's gross profit
...

Comparing a company's gross profit to that of its main competitor or its industry sheds
light on the efficiency and effectiveness of its business model
...
Analysts also want to see cash flow or net income
...

The two primary levers of a company's business model are pricing and costs
...
Both actions increase gross
profit
...
A good gross profit suggests a sound business plan
...
As this
suggests, many analysts believe that companies that run on the best business models can
run themselves
...

Forms of Business Organization
The three major forms of business are the Proprietorship; Partnership and Corporation
...
It can exist in the form of very personalized
business, for example, ‘Hajiya Zainab Fashion Shop’, ‘Uncle Ben’s Retail Stores’, ‘Jones
Barbing Saloon’, and so on, or as a family business
...
From the legal perspective, i
...
in the eye of the law, there is no distinction
between the business and its owner
...

Business Entity concept pinpoints that a business is a separate entity distinct from
its owners
...
In the real sense of it,
liabilities generally include the amount invested by the owner called capital and the
amount owed to other creditors
...


Partnership
Where two or more persons come together to carry on business with a view to
making profit, a partnership business is established
...
The former is always preferred in order to prevent or reduce
future arguments
...
Coming together of partners’ spurs out of many reasons
...

In the absence of any written agreement or deed, however, the Law of Partnership
in Western Nigeria, the 1958 Partnership Act, and the British 1890 Partnership Act,
applicable to other parts of Nigeria, specifies how to handle payment of interest on loan
from any partner, salary matters, interest on capital, share of profit or loss, etc
...
The accountant is obliged to
utilize the agreement as contained in the deed in his computations and reporting
...

As a proprietor in one-man business is liable to all creditors of the business,
partners are jointly and severally liable for the debts of the partnership in the eye of the
law
...
The only exception to this position is that kind of partner called ‘Limited
Partner’
...

A limited partnership is the one whose members’ liabilities are limited only to the
amount invested or ‘agreed to be invested’ by them
...
It should be noted that even in limited partnership, the law does not permit all
members of the partnership to be limited
...

Though there are numerous benefits derivable from partnerships, it is a fragile
kind of business in the sense that the death or retirement/withdrawal of a partner, or any
irresolvable dispute between the partners determines (dissolves) the partnership
...
One way of reducing or eliminating negative effect
of partnership dissolution on the business is to establish in strong terms, agreement(s) that
preserve(s) the life of the business in the deed
...
Two major classes of companies
are identifiable: Private and Public
...
It must have not less than two(2) and not more than fifty(50)
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shareholders
...
e
...
This
also goes to the extent of saying that a private company cannot invite the public to
subscribe to its shares and debentures
...
By the provision of CAMA of 1990,
however, this number has been reduced to two (2)
...

Some of the most important components of the Memo are: the name of the
company, the address of the registered office of the company, the nature of the
company’s business, the authorized share capital and its par value
...


Merits and Demerits of Proprietorship; Partnership; and Corporations
Merits of Proprietorship
i
...
Profits of the business are not shared with any other person
iii
...
The owner usually knows all the employees and can easily identify talented ones
v
...
Usually knows the business better in most circumstances
...
Limits to the capital (funds) that could be raised for investments
ii
...
Since business decisions usually are from a single source, the businesses are
sometimes bereft of qualitative ideas that come from two or more good heads
...
The proprietor bears all losses alone and this could lead to personal bankruptcy
...
Increase in the ability of the business to raise capital (funds) for investments more
than that of Proprietorship
ii
...
Such business usually benefit from conglomerated ideas i
...
“two good heads are
better than one”
...
Losses are not usually on a single person hence bankruptcy may not occur
...

ii
...

iv
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i
...

iii
...

v
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Merits of Corporations
Ability to raise a large amount of capital with very little restrictions
Limited liabilities especially in Public Limited Companies (PLCs)
The death of any of the shareholder does not in any way affect the company more
especially in PLCs
The companies usually benefit from conglomeration of ideas more than
Partnerships
Usually experts and professionals are involved in the management of the company
hence the tendency to always take the best possible decisions and chart the right
course of action is very high
...

Profits are shared by a lot of persons, such usually come in smaller amounts and
only seen as big where the shareholding is much
v
...

i
...

iii
...


Concepts of Limited and Unlimited Liabilities
The concepts: Limited Liability and Unlimited Liability are associated with
corporations
...

A limited company is that whose owners only have to pay a limited amount of the
company’s debt or put in another way, in which the liability of each of the owners is
limited to the shares he/she had subscribed to
...
This is
because the law does not permit moving against the estates of any of the owner in
settlement of such debts
...

An unlimited company is a direct opposite of Limited Liability Company
...


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