Tag: Stock
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Business Barriers
No business is instantaneously successful. There are multiple obstacles referred to as business barriers all owners and managers have to overcome. There are three primary groups of barriers for every business out there.
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Stock – Fundamentals of Ownership and Control
The basic principle of stock is an ownership right of a company based on the percentage of outstanding shares in possession. It is essentially a mutual understanding between shareholders that each investor’s percentage of ownership is similar in rights based on that percentage of ownership.
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Treasury Stock – Fundamentals of Stock
Those corporations doing well and flush with cash sometimes buy back stock from their investors. Once purchased back by the company, the stock is called treasury stock.
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Shareholder Dynamics in Small Business
The majority of small businesses are owned by a single individual. An additional pool is family owned or controlled. The balance usually involves friends or relatives that are passive in ownership. These forms of ownership create some interesting shareholder dynamics and if not thought out, can create some legal and financial issues in small business when a…
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How Much is a Fair Profit? – Part IV of V Return on Capital
For all investors in business, capital is the fronted equity an investor risks in exchange for a return. This return can range from zero to infinity depending on the success of the business. A fair profit is really a function of four different factors.
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Crowdfunding in Small Business
The process of collecting a large pool of investors, each contributing or investing a small amount of dollars for a highly focused project is referred to as crowdfunding.
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Shareholder Agreement – Capitalization Clause
The shareholder agreement lays out the rules of the relationship between the shareholders of a company. Most often the agreement is poorly written because the legal team fails to understand the business aspect of each of the respective sections. One of these sections is referred to as the Article of Capitalization or commonly called the Capitalization Clause.
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Stock
The one single term mostly equated to capitalism is ‘Stock’. When a business is incorporated, stock is the core medium of exchange for the investment. The company issues a certificate referred to as stock in exchange for the investment – most often cash. This is the one true form of pure risk. Most other forms of investments generally have…
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What is an S-Corporation?
Within the family of corporations, the Internal Revenue Service (IRS) grants tax free status to S-Corporations. It is strictly an IRS term. In the IRS code, there are several subchapters pertaining to corporations; Subchapter S identifies and regulates S-Corporations. In essence, S-Corporations are a pass through entity meaning that all income, losses, credits and special deductions are…