BMGT 340 Chapter Notes - Chapter 1: Corporate Raid, Bid Price, Calpers

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 340
• Professor: Karen Hallows

Document Summary

Chapter 1- corporate finance and the financial manager. Sole proprietorship: business owned and run by one person: very small, few employees, most common type of firm, 71% of businesses in us were sole proprietorships but only generated 5% of revenues, advantages: No separation b/w the firm and the owner. Owner has unlimited personal liability for firm"s debts. Life is limited to life of owner. Limited liability: liability is limited to their investment. Private property cannot be seized to pay off outstanding debts. Limited partner has no management authority and cannot legally be involved in managerial decision making for business. Limited liability company: like limited partnership but without a general partner: all owners (members) have limited liability but can also run business. Corporation"s profits are subject to taxation separate from its owners" tax obligations. First corporation pays tax on profits, then when remaining profits are distributed to shareholders, shareholders pay own personal income tax on that income double taxation.