September 14 - April 22, 2008 Ch.5-6? Corporations:...

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May 13, 2009 Ch.5-6? Corporations: Businesses set up as separate legal entities I. Corporations: a. Are owned by shareholders (aka. Stockholders) b. Policy is set by the Board of Directors c. Policy is carried out by officers d. Managers receive direction and give direction downward in the organizational chart A. Advantages: a. Limited Liability for investors b. Can raise money through sale of stock c. The form is suitable for all sizes of businesses d. Unlimited life B. Disadvantages: a. Disadvantages b. Extensive paperwork c. Two tax returns d. Double taxation e. Can get cumbersome, inflexible f. Difficult to terminate II. Types of corporations: a. C- Corporations: A general corporation, with varieties b. S- Corporations: S-corps i. Difference is S corp is taxed like a partnership. If you fulfill requirements to be an s corporation, at the end of the year you can send your information to save on double taxation. Forms are still required. c.
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This note was uploaded on 04/22/2008 for the course COM 318 taught by Professor Stewart during the Spring '07 term at Purdue University-West Lafayette.

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September 14 - April 22, 2008 Ch.5-6? Corporations:...

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