POLS 1000 Lecture Notes - Lecture 15: Limited Liability Company, Limited Liability, Operating Cash Flow

• School: York University
• Department: Political Science
• Course: POLS 1000
• Professor: Rodney Leoppky

Document Summary

Co(cid:396)po(cid:396)ate fi(cid:374)a(cid:374)(cid:272)e seeks to a(cid:374)s(cid:449)e(cid:396): (cid:449)hat a(cid:396)e the (cid:271)usi(cid:374)ess" lo(cid:374)g-term investments, how will it finance these, and how will it manage day-to-day financing. Capital (cid:271)udgeti(cid:374)g: p(cid:396)o(cid:272)ess of pla(cid:374)(cid:374)i(cid:374)g/ (cid:373)a(cid:374)agi(cid:374)g fi(cid:396)(cid:373)"s lo(cid:374)g-term investments. Manager must ensure value cash flow> cost of asset (evaluate size, timing, risk). Capital structure: balance of debt vs. equity in firm and how it will be used to finance long-term investments. Working capital: short term assets vs. short term liabilities. Managing this day-to-day ensures firm can continue operations. Limited partnership is when a general partner runs the business but limited partners do(cid:374)"t a(cid:374)d ha(cid:448)e li(cid:373)ited lia(cid:271)ilit(cid:455) to o(cid:374)l(cid:455) thei(cid:396) (cid:272)o(cid:374)t(cid:396)i(cid:271)utio(cid:374) i(cid:374) the (cid:272)o(cid:396)p. limited. Liability company (llc) is partnership taxed/operates like a partnership but has limited liability, sometimes irs taxes llc like corp. if it acts too much like one: corporation: difficult setup (must create articles of incorporation and bylaws), Ease of transfer/limited liability/ no constraint on life or equity, but had double taxation.