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Midterm #2 review All the information starting from the first midterm till the last lecture

6 Pages

Course Code
Jim Mc Cutcheon

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BUSINESS REVIEWLegal Forms of Ownership UnincorporatedSole proprietorship o Business owned by one person o Easy to form and dissolve owner has sole claim of profit o Quick decision making high levels of secrecy o Unlimited liability difficult to raise capitalPartnership o Business owned by two or more people o Formed by an agreement either verbal or written o Generalall partners have joint liability o Limitedlimited partners not active in management o Easy to form large availability of capital o Unlimited liability potential managerial conflicts o Difficult to withdraw ones investmentAll profits are taxed with personal tax rates which is progressive IncorporatedPrivate corporation o Must have less than 50 shareholders shares cant be offered to public o Limited liability secrecy o Difficult and costly to form management limitations o 155 on first 500 000 dividends taxed twice o Dividend25gross up 1333fed credit 45prov creditPublic corporation o Limited liability easy to obtain capital great efficiency of management o Loss of secrecy increased record keeping lack of personal involvement of employees o Dividend tax rate of 44grossup 18fed credit 64 prov creditOnly assets from business can be liquefied in case of bankruptcyBusiness taxed separately based on corporate tax law Forming a CorporationFederal incorporatingo Fee of 200 o Carry on business and head office anywhere in Canada o Annual filing fee of 40 o Automatically given businessand HSTProvincial incorporating o Fee of 300 o Carry on business and head office anywhere in Ontario o No annual filing fee o Must apply for businessof HSTArticles of Incorporation
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