BU111 Study Guide - Midterm Guide: Limited Liability, Sole Proprietorship, High High
19
BU111 Full Course Notes
Verified Note
19 documents
Document Summary
Incorporated business: corporation: an entity by law that has a legal status such that is separate and distinct from that of its owner and possesses same rights as an individual, owned by shareholders. Private corporation: hybrid form of ownership: legal restrictions: Must have less than 50 shareholders(therefore restricts capital) Shares can"t be offered to general public or publicly traded(not tsx) Transfer of shares are restricted(must be approved by board of directors: advantages: *tax advantages* - 15. 5% on first ,000. Limited liability(bank needs collateral such as houselike sole: disadvantages: More difficult and costly to form, difficulty in raising capital(bank wants collateral, can"t sell and distribute shares) Personal guarantees may result in unlimited liability for owner. *increased administration, record keeping, and government regulations* Dual tax of corporate profits(different dividend rate) Public corporation: advantages: limited liability of owners(shareholders) Easier to obtain capital(sell shares), ease of transferability of ownership. Perpetual life(death of shareholder has no effect)
