03+Organizational+forms

03+Organizational+forms - Click to edit Master subtitle...

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Unformatted text preview: Click to edit Master subtitle style Companies: Legal Forms and Structures Professor Arnold Lecture developed by Professors Arnold, Mahon, and Kohn Structure Legal So what? Choices Pros and cons Influencing factors Organizational So what? Choices Pros and cons Influencing factors Determines what firms MUST do. Contributes to firms ABILITY to do. The ability to execute procedures and implement strategies is influenced by the way a company is structured. Legal Structure - so what? Forming and (maybe) closing the business Selling the business Controlling the business Assuming risk Getting money: Into the business (raising debt and/or equity) Out of the business (receiving dividends) Paying taxes Disclosing information Subjecting to regulation SOLE PROPRIETORSHIP PARTNERSHIP CORPORATION CORPORATION Income Earned $100 Corporate Taxes (30%) $ 30 Net (corporate) Income $ 70 Dividends paid $ 70 Personal Taxes (30%) $ 21 Net (personal) Income $ 49 SOLE PROPRIETORSHIP Income Earned $100 Personal Taxes (30%) $ 30 Net (personal) Income $ 70 PARTNERSHIP Income Earned $100 Personal Taxes (30%) $ 30 Net (personal) Income $ 70 Legal Structure - Choices, Pros and Cons Liability Individual Partners Corporate Protection Pay Taxes Individual Partners Double Taxation Bureau- cracy Minimal Paperwork Extensive...
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03+Organizational+forms - Click to edit Master subtitle...

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