FIN 300 Lecture Notes - Lecture 1: Sole Proprietorship, Flat Tax, Progressive Tax
24 Sep 2018
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Disadvantages: equity capital limited: difficult to get money as an entrepreneur. Advantages: more capital combined from two people, human capital - more skillsets from two people, liabilities are split so risk is spread. Disadvantages: disagreement between the two partners. Legal entity, something or someone who is responsible for their own legal actions. Taxed twice: company is taxed (corporate tax) and shareholders are taxed (when they. Limited liability receive dividends: personal tax is progressive tax you earn little, you pay little tax, corporate tax has a flat tax rate, you pay a flat rate despite the amount of money you make. Disadvantages of corporation: separation of ownership and management, shareholders hire ceo to run and manage their company. Swimming pool repair: sole proprietorship, do not require a lot infrastructural cost, skills are not too hard to learn. Flower shop: sole proprietorship, less money involved, less skills involved.
