UGBA M3L7 - UGBA M3L7 How firms raise money Forms of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
UGBA M3L7 How firms raise money Forms of Business How firms raise capital (combinations) Bank loans- equipment Common stock (shares) Corporate bonds Forms of Business Most big businesses—but not all—are “Public Corporations” Intro to “Forms of Business” Key concepts: 1. Control- toy r us competition with walmart transformed into baby r us 2. Liability- what happens if you do not pay what owe; when something goes wrong, pay for it For debts For “tortuous acts” 3. Ability to raise capital for the firm 4. Taxes- taxes on profit and again on dividends 5. Taking profits from the enterprise Sole Proprietorship: Advantages Easy to start up – easier in other states; mike lee “Fictitious Name Registration” (CA) “d/b/a” (“doing business as” in other states) Complete control Pay taxes on your income tax Sole Proprietorship: Disadvantages Hard to get funding Unlimited liability Difficult to sell (in whole or part) Partnership: Advantages Pooling of talents Additional financial resources Fairly easy to start up- register with secretary of state Profits are taxed on the partners individual income taxes (no taxes paid at the Partnership level) – additional on personal Partnership Disadvantages Share the profits Need to reach consensus
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
It may be very hard to sell your interest in the firm, if you want to leave Termination/inheritance problems- not working just cashing Liability, in general . .. Individual liability- if business does not have dip into saving Some partnerships have two types of Partner: General partners – developer or builder Have unlimited liability … but get to call the shots; all cost of crushing car with crane
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/03/2011 for the course UGBA 10 taught by Professor Xuanmingsu during the Fall '08 term at University of California, Berkeley.

Page1 / 5

UGBA M3L7 - UGBA M3L7 How firms raise money Forms of...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online