companies formation - Chapter 16 Companies: Formation and...

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Chapter 16 Companies: Formation and Operations
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Learning Objectives 1. Understand the different types of companies which are permitted to exist by law in the Australian business environment 2. Appreciate the advantages and disadvantages of the corporate form of organisation 3. Understand the documentation required for forming a company 4. Appreciate the management structure commonly used for administering a company
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Learning Objectives (cont’d) 1. Understand the three main categories of equity in a company 2. Account for the issue of shares 3. Understand the basic differences between ordinary and preference shares 4. Account for the declaration and payment of cash dividends on shares, share dividends and share splits
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Learning Objectives (cont’d) 1. Account for the creation and reduction of the different types of reserves that are included in equity 2. Prepare the basic entries for income tax expense in a company 3. Prepare a company’s income statement and balance sheet for internal use
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Lecture References Hoggett, Edwards & Medlin, 6th edition, Chapter 16 Corporations Act 2001
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Types of Companies Limited companies Proprietary companies Public companies Companies limited by guarantee Unlimited companies No-liability companies
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Types of Companies (cont’d) Special companies Investment Banking Life insurance
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Advantages and Disadvantages of the Corporate Entity Advantages: Limited liability Broad source of capital Continuity of existence Ready transferability of shares Use of professional management Potential income tax savings
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Advantages and Disadvantages of the Corporate Entity (cont’d) Disadvantages: Greater governmental regulation Separation of ownership and management
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This note was uploaded on 03/21/2010 for the course KNOWLEDGE 5654 taught by Professor Mr.david during the Spring '10 term at IESE Business School.

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companies formation - Chapter 16 Companies: Formation and...

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