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Agency Law And Business Organizations Corporate Governance
0. How Business Organizations Are Operated, Led, Governed 1. How Law Provides Regulation Of Business Organizations Size Of Ownership
0. Closely Held- Family And/Or Friends 1. Publicly Held- Traded On Public Stock Exchanges Factors In Selecting Organization Form
0. Cost Of Creation 1. Continuity/Stability- Dissolution 2. Control Of Decisions 3. Owner Liability 4. Taxation (methods of dissolution critical) Organizational Choices Basic Forms of Ownership Sole Proprietorships
0. Easiest/Cheapest To Create (owned by one person) 1. Greater Continuity - the style of the business is more
stable than a corporation with changing managers 2. Liability 3. Flexible Tax Planning (taxed to owner only) 0. Smaller Company = Less Owed 1. Owner Personally Liable Partnerships
0. Definition 0. 2 or more People/Business Organizations
1. 2. 3. 4. 5. Creation Is Simple (Articles of partnership) Continuity- Dissolved When Ownership Changes Each Partner = Equal Voice Liability- Jointly & Severally Taxation- According To Level Of Ownership
1. Common Business Interest 2. Share Profits/Losses Corporations(Inc.)
(Artificial Persons under State) 5. Domestic (filed within the state we are talking about) v. Foreign (filed in another state) 6. Creation (the legal steps req'd to form a particular bus.
Org.) 7. Continuity- Perpetual 8. Publicly v. Closely Held 9. Liability- Limited Personal 0. Charter To Incorporators 1. Expensive 2. Piercing Corporate Veil 3. Alter-Ego Theory treats the corporation like a sole-proprietorship because it was not treated like a corporation paying the bills of the corporation with personal checks sometimes and paying the bills with a corporate bank account Corporate Managerial Control Corporate Taxation
10. Business Profit Tax 11. Shareholder/Dividend Distribution Tax 12. Avoiding Double Tax
4. Closely Held- Reasonable Officer Salary 5. Employee/Shareholder Expense Account 6. Capital Structure- Equity v. Debt 7. Accumulate Earnings- No Dividend 8. File Subchapter S (like any other Corp. except for
taxes) Types of Partnerships Organizational Form Hybrids
2. S Corporations 3. Limited Liability Company
0. Legal Characteristics Of Corporation 1. Can Elect To Be Taxed As Partnership 2. Nontaxable Entity 3. More Flexible Than S Corp. 4. Shareholders = "Members" Agency Relationships Agency Duties
4. Loyalty 5. Keep Principal Informed 6. Obey Instructions 7. Account For Money 8. Partnership Liability- Each Partner Is
Agent And Principal Agency Authority
2. Actual 3. Express/Written 4. Implied 5. Apparent Business Decision:
How To Operate?
0. Which Form Of Organization Is Best To Meet The Needs Of Your Business? 1. What Factors Do You Need To Consider To Answer The Preceding Question? 2. How Can You Actually Accomplish Business On Such A Large Scale? 3. What Are The Legal Concerns Related To This Potential Growth? 11
End of Chapter 11 ...
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- Spring '08