The Proprietary Theory and the Entity Theory of Corporate Enterpr.pdf

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Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 1955 The Proprietary Theory and the Entity Theory of Corporate Enterprise. Arthur Theophile Roberts Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected] . Recommended Citation Roberts, Arthur Theophile, "The Proprietary Theory and the Entity Theory of Corporate Enterprise." (1955). LSU Historical Dissertations and Theses . 132.
THE PROPRIETARY THEORY AED THE ENTITY THEORY OF CORPORATE ENTERPRISE A Dissertation Submitted to the Graduate Faculty of the Louisiana State University and Agricultural and Mechanical College in partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Department of Accounting Arthur T. Roberts B. S. B. A., Boston College, 1950 M. B. A., Boston University, 1951 August, 1955
ACKNOWLEDGEMENT The writer wishes to express appreciation to Dr. Lloyd F. Morrison, Professor and Head of Department of Accounting, Louisiana State University, for the valuable assistance and guidance he has given during the prepa­ ration of this dissertation. The writer wishes to acknowledge, also, the helpful suggestions furnished by Dr. P. Francis Boyer, Professor of Business Statistics and Director of Division of Research, College of Commerce, Louisiana State University, Dr. Harlan L. McCracken, Professor and Head of Department of Economics, Dr. Leon C. Megginson, Associate Professor of Business Administration, Dr. James M. Owen, Assistant Professor of Accounting, and Dr. Stanley V/. Preston, Professor of Business Administration, for improving the original manuscript. ii
TABLE OF CONTENTS PAGE ACKNOWLEDGEMENT ...................................... ii ABSTRACT ................................................ viii I. INTRODUCTION .................................... 1 Problem ................ ...................... 1 Importance .................................... 1 Scope ......... , ........................... 2 Method ........................................ 2 History ...................................... 3 Definitions .................................. 6 Formulas ...................................... 8 Stockholders andtaxpayers ............. 10 II. LEGAL VIEWPOINT OFTHE PROPRIETARYTHEORY AND THE ENTITY THEORY OF CORPORATEENTERPRISE . . . 11 Two theories .................................. 12 Stockholders .................................. 13 Creditors .................................. 21 Government .............. ....... .............. 24 Management .................................... 25 Miscellaneous ................................ 30 Summary .......... .. ......................... 34 III. TAX VIEWPOINT OF THE PROPRIETARYTHEORY AND THE ENTITY THEORY OF CORFORATE ENTERPRISE ......... 37
PAGE Problem of double taxation ................... 3$ Double taxation is not equitable ............. 39 No double taxation present ................... 42 Considering both arguments ................... 44 Stockholders ............ 47 Bondholders ........................... 4$ Management .................................... 4& Employees .................................... 50 Government .......... 50 Miscellaneous ..................... . . . . . 51 Summary . . ................................ 52 IV. INVESTMENT VIEWPOINT OF THE PROPRIETARY THEORY AND THE ENTITY THEORY OF CORPORATE ENTERPRISE .

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