HTA 602 Lecture Notes - Lecture 1: Socially Responsible Investing, W. M. Keck Observatory, Financial Engineering
20 Sep 2017
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Document Summary
3 questions to answer when starting own business: what business should we be in, where will the financing come from, how will we run or operate our business, so how we finance is the second question. Financial managers try to answer some or all of these questions. 3 major forms: sole proprietorship, partnership, general, limited, corporation. In other countries, corporations are also called joint stock companies, public limited companies and limited liability companies. Advantages: easiest to start, least regulated, goes into personal tax return, single owner keeps all the profits, taxed once as personal income. Disadvantages: unlimited liability, limited to life of owner, equity capital limited to owner"s personal wealth, difficult to sell ownership interest. Advantages: two or more owners, more capital available, relatively easy to start. Disadvantages: unlimited liability, general partnership, limited partnership, partnership dissolves when one partner dies or wishes to sell, difficult to transfer ownership.
