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Unformatted text preview: ore partners have limited liability as long as at least one
partner (the general partner) has unlimited liability. The limited partners cannot take an
active role in the firm’s management; they are passive investors. S corporation (S corp) A tax-reporting entity that (under Subchapter S of the Internal Revenue Code)
allows certain corporations with 75 or fewer stockholders to choose to be taxed as
partnerships. Its stockholders receive the organizational benefits of a corporation and
the tax advantages of a partnership. But S corps lose certain tax advantages related to
pension plans. Limited liability corporation (LLC) Permitted in most states, the LLC gives its owners, like those of S corps, limited liability
and taxation as a partnership. But unlike an S corp, the LLC can own more than 80%
of another corporation, and corporations, partnerships, or non-U.S. residents can own
LLC shares. LLCs work well for corporate joint ventures or projects developed through
a subsidiary. Limited liability partnership (LLP)a A partnership permitted in many states; governing statutes vary by state. All LLP
partners have limited liability. They are liable for their own acts of malpractice, not for
those of other partners. The LLP is taxed as a partnership. LLPs are frequently used by
legal and accounting professionals. aIn recent years this organizational form has begun to replace professional corporations or associations—corporations formed by groups of
professionals such as attorneys and accountants that provide limited liability except for that related to malpractice—because of the tax advantages
it offers. CHAPTER 1 TABLE 1.3 The Role and Environment of Managerial Finance 9 Career Opportunities in Managerial Finance Position Description Financial analyst Primarily prepares the firm’s financial plans and budgets. Other duties include financial forecasting, performing financial comparisons, and working closely with accounting. Capital expenditures manager Evaluates and recommend...
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This document was uploaded on 01/19/2014.
- Fall '13