finance exam 2
Terms
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- Sole proprietorship
- Uses an assumed/ficticious name, personability, less regulation, and 1 tax form
- General Partnership
- Income taxed only at the partner level, liable jointly and individually, all partners are liable for obligations of the partnership, mgt responsibilities and profits are divided
- Limited Partnership
- at least 1 general and 1 limited partner, limited partner is only liable for investment and cant take an active role in mgt.
- Principals Duties
- Compensation, reimbursement and indemnification, cooperation, and safe working conditions
- agents duties
- loyalty, obedience, accounting, performance
- Respondeat Superior
- principal is liable if it is within scope
- Rupla and rupa
- fills in where agreement doesnt cover an issue
- classic c-corps
- there is an entity and and entity tax, double taxes on dividends, limited liability, closely or publicly held.
- Sub S
- Hybrid, only 1 class of stock and no > 75 SH, unanimous vote to elect status, limits on who can be sh-no corps, llc's, or foreign. has a partnership taxation
- llc
- limited liability, partnership tax, no limit on members, anybody can be a sh, free transferability, continuity
- equity
- common or preferred stock
- cumulative preferred stock
- must pay all dividends owed before paying common stock
- convertible preferred
- preferred stock is converted into common at a predetermined equation
- By estoppel
- The principal can't deny that somebody is their agent after leading a 3rd party to believe they are. Apparent authority
- corp opportunity theory
- can't take personal advantage of an opportunity that should have belonged to the corp
- cooperatives
- non profit organization formed by individuals to market products
- syndicates
- investment group that privately agrees to come together to finance a large project
- appropriation
- using somebody's name for commercial gain without permission
- misappropriation
- taking somebody elses idea
- proximate cause
- is the breach of duty foreseeable? Negligence torts
- negligence per se
- statuatory breach- not obeying safety rules and regulations
- contributory negligence
- last clear chance
- comparative negligence
- allocates recovery based on % fault allocated to plaintiff. modified form=must be > 50%
- statue of limitation
- cant file a lawsuit after a certain amount of time after injury
- statue of repose
- not liable for old products
- strict liability
- breach of warranty
- liquidating preferred
- if company goes into debt you get whats left over
- creating a corp
- select the state, articles of incorporation (pick name, describe what you are going to do, describe your stock, file with state), certificate of incorporation, call first meeting of the board of directors (adopt bylaws)
- DEBENTURES
- UNSECURE BOND
- operating lease
- off balance sheet, used as an operating expense. If NPV < 90% of what it will be
- synthetic real estate lease
- operating lease. tax purposes- ge=lender, customer=owner. owner gets to depreciate the property. accounting purposes- ge=owner customer=lessor.
- derivative
- suing on behalf of the company