多媒体课件_财务会计(双语)_本_02周.pptVIP

Types of Ownership Corporation Owners are called shareholders or stockholders. Publicly owned vs. privately owned corporations Public - Shares in the ownership are sold to the public on a stock exchange; the corporation can have many thousands of shareholders. Private - Shares in the ownership are owned by families, small groups of shareholders, or a single shareholder and are not sold to the public. Types of Ownership Management by the owners: Sole proprietorship - The owner is an active manager in day-to-day operation of the business. Partnership - Partners are usually active managers in day-to-day operations of the business. Corporation - Shareholders usually do not participate in the day-to-day operations of the business – shareholders elect a board of directors who hires a management team. Advantages and Disadvantages of Forms of Ownership Corporations Advantages Limited liability Easy transfer of ownership - shares of stock can be bought and sold easily on stock exchanges Ease of raising ownership capital because of many potential stockholders Continuity of existence - life of the corporation continues even if its ownership changes Advantages and Disadvantages of Forms of Ownership Corporations Disadvantages Possibility of double taxation - corporation pays tax at the entity level and its owners pay taxes on distributions of earnings to them Advantages and Disadvantages of Forms of Ownership Proprietorships and Partnerships Advantages No taxation at the entity level - income of sole proprietorship and partnership is attributed to the owners as individual taxpayers Advantages and Disadvantages of Forms of Ownership Proprietorships and Partnerships Disadvantages Unlimited liability - creditors of the business can look to the owners’ personal assets for repayment Not easy to transfer ownership Not easy to raise ownership capital with few owners No continuity of existence - changes in ownership terminate the proprietorship or partnership Accounting for Owners’ E