The Legal Environment of Business: Text and Cases
10th Edition
ISBN: 9781337535878
Author: Frank B. Cross; Roger LeRoy Miller
Publisher: Cengage Learning US
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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
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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
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