Business Review Questions

Q1: List the stakeholders involved and their influence. Identify any fundamentals of business or capitalism involved.

Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

1) Describe the basic features that distinguish the four basic forms of business ownership sole proprietorships, general partnerships, C corporations, and limited liability companies.

• LIABILITY – Stockholders personal assets are not subject to claims of creditors. The corporation itself is responsible for its actions and liabilities. • INCOME TAXES – Shareholders in a corporation are subject to “double taxation” as in first the corporation is subject to corporate taxation, then money is paid out in dividends. Which then is taxed again as personal income tax. • LONGEVITY - The life of a corporation is limitless as

b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

both a and b (Yes.  The corporate structure provides for limited liability and ease of transferring ownership.)

1. Review the definition of management at the beginning of the chapter and briefly define each of the 4 functions. What are the challenges in carrying out these functions in today’s hyper-competitive marketplace?

Regular C corporation: A regular C corporation is the most is the most sophisticated form of business and most common for large companies. It gets its name from the 1986 IRS code... C-corp.

In a C- Corporation the profits are divided among the stockholders. The amount of profits depend on the percentage stocked owned. For example if you owned 15 percent of the corporation’s stock, you may receive 15 percent of the profits. The more stock you own the greater the return.

Also be obliged to pay taxes and dealt with civil and little acts of criminal penalties perform through agents. “The corporation is governed primarily by the statutory guidelines of the state statute that provides for its creation. The requirements for the creation and management of a corporation vary somewhat between the states, but as is usually the case, there are common threads that can be found in the corporate statutes of all states.” (Rogers,

The Company Corporation, also known as www.incorporate.com, was founded in 1972. The Company Corporation is an affiliate of Corporation Service Company (CSC), which was formed by two 1899 period pioneers, Christopher Ward and Josiah Marvel. The Company Corporation's entire focus is on assisting small business owners to form their companies.

d. Does the firm appear to have an effective corporate governance structure? Explain any shortcomings.

With a c corporation you have the potential to build your business to such a level that it can attract funding by becoming a public company traded on a national exchange. Which allows the company to have no restrictions on ownership, allowing them to unlimited growth potential. Another advantage of owning a c corporation is that stock proprietorship is divorced from corporate administration. An investor is entitled to economic benefits based upon number and types of dividends owned, but the investor does not have the right to manage the day to day business of the

A Corporation can be defined as a legal creation, however the corporation itself, would only exist on a piece of paper. A corporation will never die a natural death like humans die naturally, and corporations will always outlive the individual who created it. With that said, the corporation itself is never really committed to any employee or committed to any neighbor. However, a corporation can always demand employees, a corporation can always demand taxes that are extremely high, and a corporation can also restrict environmental laws. Corporations hold a great deal of power in today's society.

In order for an informed decision to be made in regards to appropriate business structure for any business it is necessary to understand each business structure separately and any attempt to understand business structure must consider the C-corporation as a baseline against which to compare subsequent business structures. A C-corporation is a business organized as a separate entity from the owner or owners of the business that requires the observation of certain formalities. In Texas these formalities include adopting bylaws, maintaining a record of accounts, issuance of stock, recording the issuance and transference of stock, recording minutes of board of director and shareholder meetings, as well as maintaining a record of current and past shareholders (Tex. BOC § 21). It is important to remember that corporate formalities will require time and expense to maintain and every attempt should be made to comply with these requirements to protect the liability limitation of the corporation’s shareholders, officers, and owners.