Exam Hints - Comparing forms of Ownership Factor Ease of...

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Comparing forms of Ownership Factor Sole Proprietorship Partnership Large Public Corporation Small Private Corporation Ease of formation Easy to form Need partnership agreement Articles of incorporation must be completed Articles of incorporation must be completed Incentive/ satisfaction High levels of personal incentive, freedom and satisfaction High levels of personal involvement and satisfaction High levels of personal incentive for major shareholders Simplicity/ speed Very fast decision making Slower decision making Annual reports are audited, takes time, slows business Difficult and costly to perform Tax treatment Losses can be written off against other sources of personal income, taxed on the basis of personal rates that are higher than the small business rate charged to private corporations Losses can be written off against other sources of personal income, taxed on the basis of personal rates that are higher than the small business rate charged to private corporations Dual taxation of corporate profits if distributed to owners in form of dividends Public corporation of 30% + dividend rate off 44% gross up and 18% + 6.4% tax credit Dual taxation of corporate profits; small business rate and dividend rate of 25% gross up and 13.33% federal and 5.13% provincial tax credit Government treatment Given a lot of government support Limited regulation Heavily regulated Increased administration, record keeping, government regulations Secrecy No documents published No secrecy, required to publish annual reports Not required to publish annual reports Liability Unlimited liability Unlimited (joint and several) Limited Liability Limited liability; personal guarantees must be put up for loan anyway Continuity/ Easy to form and dissolve (in & out, Difficulty Ease of transferability of Perpetual Life
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This note was uploaded on 05/08/2011 for the course BUS 111 taught by Professor Jimmccutcheon during the Fall '09 term at Wilfred Laurier University .

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Exam Hints - Comparing forms of Ownership Factor Ease of...

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