ADMS 1000 Lecture Notes - Lecture 4: Double Taxation, Takeover, Microsoft Powerpoint

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Eytan Lasry

Document Summary

Less then 20% of business are companies, account for 90% of business revenue in us. Advantages: access to capital, infinite life, limited liability transferability and liquidity of ownership. Disadvantages: double taxation, costs and disclosure, principle/agent problem-governance. Buying another company is fast way to grow business. Giving members if company stock is good idea corporate governance. Structure of how corporations are goverened and controlled. Spells out rules and procedures for making decisions -executives control the corporation. Separation of ownership and control: -late 19th century corporations become too large and shareholders became to widely dispersed. Owners knew less about business" operations than managers. Railroad growth resulted in professionalization of management functions. Railroad was hard to manage -new management techniques were born. Solutions: aligning incentives of principles and agents by providing stock options, shares, bonuses to top management teams. Monitoring by independent board of directors and external auditors. Corporate charter: provides rights and terms for existence shareholders(principles_