FIN 3104 Lecture Notes - Lecture 1: Limited Liability Company, Accelerated Depreciation, Limited Liability

• School: Virginia Tech
• Department: Finance, Insurance, Business Law
• Course: FIN 3104
• Professor: Keown

Document Summary

One person owns, holds title and is legally responsible. Generally partners run the business and face unlimited liability for the firms debts, while limited partners are only liable for the amount they invest. Disadvantages: difficult to transfer the ownership of the general partner. Business form existing separate and apart from its owners. Exam: given taxable income, must tell what taxes are. Example : given between 335k 10 millions about 18 1/3 million take taxable income x . 35 if 335k take table income x . 34. Accelerated depreciation take more depreciation in early years and less in latter years. Less profits in early years & more in latter years. Less taxes in early years and more in latter years. More cash flow in early years and less in latter years. Borrow money: pay interest and interest payments lower taxes. Money fro new investors: sell stock, pay the stockholders dividends, & dividends are paid out after taxes.