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BUS 251 Lecture : BUS 251 Chapter 11 Notes

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School
Simon Fraser University
Department
Business Administration
Course
BUS 251
Professor
Steve Gibson

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Document Summary

Corporation: there is a separation from the shareholders legally from the operations. The board of directors are the people who are decision makers in the business. General partners have unlimited liability and they make day-to-day decisions. Limited partners have limited liability and they have limited involvement in the partnership. Transfer of ownership is easier for corporation but there are cost to file corporate income tax returns etc. A corporate company can get incorporated to protect the shareholders because they are not making the decisions for day-to-day activities. Articles of incorporations include all the information how the business will be run and who are people responsible for what kind of decisions. The article of incorporation states the authorized shares (the maximum number of shares that the company can issue) Issued shares: shares that the company has sold. Par value: the dollar amount that is attached to each share.

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Related Questions

Partnerships refer to more than one owner. A limited partnership ______________.
a) consists of general partners and limited partners, at least one of each
b) is a shadow firm for a much larger corporation. It is like a shell company to dispose of risky assets
c) is taxed similar to a corporation, whereas a general partnership is taxed like a sole proprietorship
d) is limited by the number of partners allowed. There can only be a total of 10 partners actively involved in the business

Based on the chart, the primary responsibility of shareholders is to:

A) run the business by electing a board of directors, who then hire the company's leaders.

B) run the business by electing a board of directors and hiring a president and other leaders.

C) make business decisions on the advice of a board of directors, a president and other leaders.

D) make business decisions on the advice of a board of directors, who follow the expertise of leaders.

In a sole proprietorship, the profits earned by the business are:
 
A. taxed as income for the business, but exempt from the personal income tax paid by the owner.
 
B. taxed at the lowest corporate rate.
 
C. the property of the owner, except for taxes owed to the government.
 
D. tax-free if the appropriate exemption is filed with the local government.