Passive income is a form of earning money without materially participating in the activity from which the income is derived. There are two definitions for the reader to understand. There is the common business definition and the tax code definition.
Month: June 2013
Sales are a component of revenue. Revenue encompasses several sources of income including sales. Other sources of revenue include interest, trust monies, royalties, and fees. In effect, revenue includes all sources of income, realized and unrealized. Sales are divided into two levels, gross sales are all sales at the regular price; net sales are gross sales less discounts or adjustments associated with that particular product(s).
When shareholders invest into a corporation, there is an expectation of limited losses amounting to the financial investment made. However, if the company is not properly run, officers, directors and shareholders are exposed to the blade of the law. This is known as piercing the corporate veil. Therefore it is critical for any shareholder, director, or officer of a small corporation to understand what is required to protect your personal assets from exposure to creditors and the long arm of the government.