The Legal Environment of Business: Text and Cases (MindTap Course List)
10th Edition
ISBN: 9781305967304
Author: Frank B. Cross, Roger LeRoy Miller
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 1IS
Summary Introduction
Case summary:Company NB is a small business company. Twelve members of a single-family own one class of the stock of company NB. The corporate income of the company is taxed at the corporate level and shareholder level.
To find: The way by which company NB can avoid double
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
which is wrong
The IPO tax applies only to the initial public offering of a closely held corporation.
A sale is not subject to stock transaction tax if the shares were not listed and sold through the Philippine Stock Exchange (PSE).
The sale, barter or exchange, including block sale, of listed stocks through the Philippine Stock Exchange (domestic or foreign stocks), other than by dealers in securities, is subject to a tax of 60% of 1% (6/10 of 1%) based on gross selling price.
The sale, barter or exchange, including block sale, of listed stocks through the Philippine Stock Exchange (domestic or foreign stocks), other than by dealers in securities, is subject to a tax of 50% of 1% (5/10 of 1%) based on gross selling price.
Besides a corporation setting (listed and non-listed), identify a situation, an arrangement, or an organization where an agency problem (dilemma) may arise. What is the main reason for this agency problem? What would you do to resolve or reduce it? Assuming you were the principal in this situation.
a) Explain what company auditors are and how they are appointed and removed.
b) Explain the duties and rights of auditors in a company.
Chapter 18 Solutions
The Legal Environment of Business: Text and Cases (MindTap Course List)
Knowledge Booster
Similar questions
- Explain Conciliation between MPS and sales and operating plans?arrow_forward1. The reasons for involving more than one person in ownership or operation of a business entity do not include: a. The ability to shift risks to third persons. b. The ability to diversify risks. c. The ability to achieve economies of scale. d. All of the above are reasons to involve more than one person. 2. “Agency cost” means: a. The commission that is paid an agent for obtaining a contract. b. The pay due to one’s employees. c. The costs to the principal associated with an agent’s motive to serve him or herself. d. Profit-sharing or other arrangements to align an agent’s motives with those of his or her principal. 3. “Limited liability” means: a. That an investor cannot lose his or her investment. b. That an investor cannot lose more than his or her investment. c. That an investor can lose his or her investment and may be responsible for a designated percentage or amount in excess of his or her investment. d. That an investor must refrain from active management in order to limit…arrow_forward66) As a governance mechanism the “threat of takeover” refers to: a) The risk that the government might acquire the firm b) The danger that the firm might be acquired by others who offer the stockholders better management of the firm. c) Both A and B d) Neither A nor Barrow_forward
- 9. Corporations can pay lower taxes than partnerships. O True O Falsearrow_forwardWhich ones of the following are primary market transactions? (mark all that applies) ✔ An initial public offering (IPO) of company's securities. Stock ownership transfer from one shareholder to another shareholder Gift of stock from one shareholder to another shareholder Sale of a new share of stock to an individual investor Sale of currently outstanding stock by a dealer to an individual investor Gift of stock by a shareholder to a family memberarrow_forwardJeremy is considering a corporate recapitalization as a gifting technique and has come to his financial planner for more information. Which of the following statements regarding corporate recapitalization are CORRECT? The stock is recapitalized and divided into nonvoting preferred stock and voting common stock. Jeremy retains control of the corporation through the voting rights associated with his preferred stock. Recapitalization can be used in any corporation. The gift of stock given to the junior family members may qualify for valuation discounts. A) II, III, and IV B) I and III C) II and IV D) I and IIarrow_forward
- Lowe’s Companies, Inc. is a business supply and home improvement retailer incorporated in Mooresville, North Carolina. If Lowe’s Companies, Inc. opens a store in any state in the United States other than North Carolina, it will be considered which of the following in that state? A. A domestic corporation B. A closed corporation C. An alien corporation D. A foreign corporationarrow_forwardSolve this question with steps please. The subject is legal environment of business (BUS 156).arrow_forwardThe S-corporation form of organization allows a corporation to avoid double taxation.;True or Falsearrow_forward
- 1. Exempt from the registration requirement of the Securities Act of 1933 are offerings of securities a. made to a small number of knowledgeable investors. b. issued by for-profit organizations. c. involving a large dollar amount. d. only for large organizations that are for-profit. 2. Global Investments is a foreign investor. With respect to the operations of a limited liability company in the United States, Global can a.not become a member but can participate. b. become a member and participate.c. not become a member or participate. d. Become a member but cannot otherwise participate. 3. Quorum requirements include _________ a. number of decision-makers that must be present before business can be conducted. b. how often decision-makers must meet each year. c. maximum number of shareholders allowed in for-profit companies. d. all other answer choices 4. Fiduciary duties of the directors and officers include a.duty of care b. duty of loyalty c.…arrow_forwardOne of the two directors of a private company died in a car accident. Discusswhether the board of directors of the company is still valid. Support your answerwith reference to the provision of the Companies Act, 2016. Please give answer in details base on companies Act, 2016 below section. Section9(d) Section196 Section20Barrow_forwardIdentify 2 things that legally distinguish a 501 c 3 nonprofit enterprise from a “for profit” company or business in the U S. and explain the risks/ramifications if a designated nonprofit entity does not conform to these requirements. Also address who is ultimately responsible for assuring that a NFP organization is operating in accordance with relevant laws and regulationsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
BUSN 11 Introduction to Business Student EditionBusinessISBN:9781337407137Author:KellyPublisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...BusinessISBN:9781337386494Author:Mary Ellen Guffey, Dana LoewyPublisher:Cengage Learning
Accounting Information Systems (14th Edition)BusinessISBN:9780134474021Author:Marshall B. Romney, Paul J. SteinbartPublisher:PEARSON
International Business: Competing in the Global M...BusinessISBN:9781259929441Author:Charles W. L. Hill Dr, G. Tomas M. HultPublisher:McGraw-Hill Education
BUSN 11 Introduction to Business Student Edition
Business
ISBN:9781337407137
Author:Kelly
Publisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...
Business
ISBN:9781337386494
Author:Mary Ellen Guffey, Dana Loewy
Publisher:Cengage Learning
Accounting Information Systems (14th Edition)
Business
ISBN:9780134474021
Author:Marshall B. Romney, Paul J. Steinbart
Publisher:PEARSON
International Business: Competing in the Global M...
Business
ISBN:9781259929441
Author:Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher:McGraw-Hill Education