ACC 210 Lecture Notes - Lecture 1: Net Income, Tyco International, Accounting Equation
19 Sep 2016
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Tax advantages: legally responsible, taxed as own personal income, profit gets taxed once: partnership: 2+, all contribute, all have a say. Tax advantages: personal income tax only once but personally liable for all debts and legal obligations: corporation. Easier to transfer ownership- you can just buy stock instead of investing in a partnership. Investors receive shares of stock to indicate their ownership claim. Easier to raise funds because individuals can become stockholders by investing relatively small amounts of money. No personal liability: separation between ownership and management. Tax rate usually higher than regular tax rate, its taxed once as legal entity and what"s left over goes to investors and they"re taxed for personal income. Filing ipo: initial public offering; people can purchase stock. You get money but you lose ownership (transfer ownership: there are also hybrid businesses. Combine tax advantages of partnerships with the limited liability of corporations.
