ADM 1100 Study Guide - North American Free Trade Agreement, Yorkshire Carnegie, Franchising

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Document Summary

Advantages: very easy to form/dissolve, must be legal, license may be required, simplicity, government preferential treatment, sole claim on all profits (losses, personal incentive/satisfaction, pays only personal income tax, secrecy. Advantages: easy to form, not so easy to dissolve, owners are taxed at personal rate, larger availability of money, diversification of management skills, retention of valuable employees, personal interest/satisfaction. Rights of the shareholder: to vote for the board (one vote per share, to receive dividends if declared, to hold/sell any share registered in your name, to share in assets on a pro rata basis, pre emptive right (the right to maintain percentage ownership of business, to inspect the books. Preferred: usually, no vote, dividends (if declared); (at certain rate, share in assets (before common shareholders, rate of return attached, so if a dividend is declared the preferred shareholder gets the fixed % of the stock price, cumulative, less risk (hoping for dividends)

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