Fi 515 Week 1 Homework

In: Business and Management

Submitted By lakers12
Words 2075
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Mini Case (p. 45) A. Why is corporate finance important to all managers? Managers of a company must know the finance of a company as these help managers to know the health of the company and can act accordingly with a common guideline.

B. Describe the organizational forms a company might have as it evolves from a start-up to a major corporations. List the advantages and disadvantages of each form. SOLE PROPRIETORSHIPS: 
A sole proprietorship is a business owned and managed by one individual. A sole proprietorship is not a legal entity. It refers to an individual who owns the business and is personally responsible for its debts. Owners may freely commingle business and personal assets. Owners cannot raise capital by selling and interest in the business. The owner reports all income and expenses on the owner’s personal tax return. The business terminates on the owner’s death or withdrawal. However, an owner can sell the business, but can no longer remain the proprietor. GENERAL PARTNERSHIPS: 
A general partnership is a business organization formed when 2 or more individuals or entities form a business for profit. All partners share in the management and in the profits and decide on matters of ordinary business operations by majority of the partners or by percentage ownership of each partner. Each partner is liable for all business debts and bears responsibility for the actions of the other partners. Each partner reports partnership income on their individual tax return. A partnership dissolves on the death or withdrawal of a partner unless the partnership agreement provides otherwise. Partnerships are relatively easy and inexpensive to form and require few ongoing formalities. LIMITED LIABILITY COMPANY: 
 a limited liability company is a new and flexible business organization of one or more owners that offer the advantages of…...

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