Jones purchase the stock of Smithon outright leaving Smithon intact? The stock should not be purchase by Mr. Jones. Mr. Jones acquiring the assets, liabilities and also would inherit the contractual obligations of the selling corporation, would, be the results of the purchase. In lay terms, he has bought the existing Smithon Corporation and he is responsible of ensuring daily operations run efficiently but the tax aspect of acquisition he is responsible for existing and any future tax liabilities that the selling corporation had. It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock.
A C Corporation is considered an entirely separate entity and those that make up the company such as officers, directors, managers, and shareholders are not personally liable for the acts of the company. This is the main advantage of a C Corporation. A disadvantage is that profits of the corporation are taxed at two different levels. One at the corporate level and then another on the dividends of the shareholders. · Liability-A C Corporation has limited liability in that it is seen as a separate entity from the owners, which in turn protects their personal assets from being taken to pay for the company’s debt or liability losses.
Claude and Jacky have heard that partnerships have “unlimited liability‟ and that each partner in a firm has actual and apparent authority to bind the firm. What do these things mean? Unlimited Liability is that the partners of the business are equally liable in most circumstances if proven to be in the wrong. There is also no capped maximum for the unlimited liability hence the name. Each Partner acts as an agent for each other in the absence of the other partner.
This made it difficult to conduct business from state to state. When people purchased goods from other states, they had to pay a tax. In these respects, under the Articles of Confederation, the United States were not treated as united states, but as many different countries. The new Constitution corrected this by stating that only the Federal Government has the right to coin money. Therefore, people no longer had to worry about changing the currency when crossing into other states.
Under law the employee is not required to pay any taxes and will have to pay capital gains tax. The second stock options is called a nonqualified stock option (NQSO), which this type of option doesn’t receive any type of special incentives and is the same as a cash compensation. The member is required to pay payroll, income tax, and capital gain tax if the stock is sold. (Kaplan, Warren, 2010). 2.
United State – 487 U.S. 99 (1988)” (Braswell v. United States, 487 U.S. 99) the Fifth Amendment would not apply. Braswell incorporated both companies and the “courts have recognized that corporations exist as a separate legal person” (Melvin, 2011, pg. 554). The details of corporate records are not privilege under the Fifth Amendment and “a corporation does not have a Fifth Amendment privilege against self-incrimination” (Braswell v. United States, 487 U.S. 99). Conclusion In this case the courts make it clear that there is absolutely no instance where documents related to a corporation or any person connected to the corporation would be able to rely upon the Fifth Amendment against self-incrimination.
Corporations rely on the functions of law to protect their business dealings while managing business connections. Legal counsel, arbitrary agreements, order, safety, establishing good rapport with consumers, vendors, etc. are a few functions of business law (ehow.com, 2015). Like you or I, businesses have to pay taxes on income they earn, and tax law determines how businesses pay taxes. Business owners can choose from one of several business options that the Internal Revenue Service’s offer in regards to tax (nbea.org, 2007).
Benefits of setting up a limited company from being a successful partnership In order for us to be able to understand the benefits, I will first of all define and describe both of the two types of businesses. A partnership is a business run by two or more people with a view to making a profit. Generally, partnerships are small businesses, but there certain types of business activities in which very large partnerships are operated. Professional partnerships, such as those between solicitors, may develop to be very large businesses. There is a legal restriction where the number of partners in most types of partnerships are limited to 20.
Consequently we should take the average of all three models, because every model has it´s pros and cons against the other and we can´t decide which model calculates the right price. Because for the DDM we have to estimate the Dividends, because a non-publicly traded company does not give out dividends. The price-ratio model needs to compare the ratios of each company to similar companies within the industry. This could be tricky if Citrus Glow has the biggest market shares. The Corporate Value Model, also known as Free Cash Flow model also has it´s limitation regarding to the spending today and not in the past.
What are the gains and risks involved in the entire transaction and how are mergers different from acquisitions? A Merger, as the name suggests occurs when two companies go ahead and merge into a bigger company, mostly under a different name. This is often a result of stock swap, which takes place when two companies agree to share the risks involved in the deal. A merger might resemble an acquisition, it is indeed quite similar, but it is named so in most cases due to political and marketing reasons to avoid media frenzy. Well, obviously a company acquires the other or two companies merge together to accelerate their growth without having to create a separate business entity.