ACCTG 241 Lecture 2: Chapter 13, Lecture 2
13 Feb 2017
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Document Summary
Rewards of equity financing: return limited only by the performance of the company, rewards of owning a business. Risks of equity financing: not receiving a satisfactory return, losing some or all of investment (failure) Business ownership structures: sole proprietor one owner, partnership 2+ owners, corporation multiple owners, give stocks, etc. Advantages and disadvantages of sole proprietorships and partnerships: advantages: easy to be formed, income taxes only at the individual level, no double taxation, more owner involvement, disadvantages: unlimited liability, limited ability to raise capital, mutual agency (partnerships), Advantages and disadvantages of corporations: advantages: limited liability, unlimited life, ability to raise capital, disadvantages: difficult to form, regulatory requirements, double taxation.
