RSM219H1 Lecture Notes - Limited Liability Partnership, Limited Liability, Legal Personality
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RSM219H1 Full Course Notes
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Document Summary
Digging into components of shareholders" equity in a corporation. How the ownership interest is measured and disclosed in the financial statements. When a company raises more capital by issuing new shares, how the new issuance would affect current holdings. Forms of organizations: sole proprietorship: single-owner business. All profits and losses belong to the owner, and all decisions are made under the owner"s direction. Business and owner are same legal entity. Sole proprietors are required o combine the profits or losses from their business with their personal income. Little reason for the owner to distinguish the initial investment from the earnings retained in the business (no other shareholders) Unlimited liability (both business assets and personal property) Must close down or sell the whole business. Owner"s equity section only has one account owner"s capital; it is used: When the owner puts new capital into it, When the owner withdraws cash (withdrawal accounts: partnership: two or more individuals agree to conduct business together.
