MGMT 108 Lecture Notes - Lecture 13: Double Taxation, S Corporation, Preferred Stock
Document Summary
Domestic (incorporated in this state) vs foreign (incorporated in another state) A public company says that there are thousands of public shares and they are publically traded so almost anyone can buy them at any time. Closely held and private shares kind of mean the same thing: types of stock: Common stock- what you normally hear of stock. Preferred stock- shareholders that own this kind of stock get privileges ahead of the common shareholders. Advantages of doing business as a corporations: in general, shareholders are not personally liable for corporate debts (exception is piercing the veil) Disadvantages of doing business as a corporation: double taxation of same profits when distributed in the form of dividends to shareholders- the exception is s corporation election. Certain corporations can file as s corporations and then they get exempt from corporate taxes- so now they are taxed by flow through taxation.
