59
votes
Accepted
Who receives the money when one company buys another?
Shareholders of Monsanto will get the money from Bayer. Shareholders are independent people or entities.
Think of Monsanto as a thing that shareholders had. This thing is now being purchased by ...
- 795
54
votes
CEO entitlement from share ownership?
In its basic form, a corporation is a type of 'privileged democracy'.
Instead of every citizen having a vote, votes are allocated on the basis of share ownership. In the most basic form, each share ...
- 41.5k
36
votes
If a company that doesn't pay dividends makes a large profit, where does it go?
It doesn't go anywhere. It stays in the company as undistributed profit.
If the company has too much cash and no opportunities to invest it in further growth, it can be harmful to the company's ...
- 794
27
votes
Accepted
I received a share of Apple stock. Now what?
Congratulations! You own a (very small) slice of Apple.
As a stockholder, you have a vote on important decisions that the company makes. Each year Apple has a stockholder meeting in Cupertino that ...
- 115k
24
votes
Who receives the money when one company buys another?
Monsanto is a publicly traded company that trades under the ticker MON. The stock is owned by a wide range of owner around the world. The buyout offer from Bayer is an all cash offer. Bayer will buy ...
- 3,997
19
votes
Where can publicly traded profits go but to shareholders via dividends?
If a company earns $1 Million in net profit (let's say all cash, which is not entirely realistic), it can do one of three things with it:
Invest it back in the company (by buying more assets to ...
- 129k
17
votes
Bank loan responsibility for corporation partners
If the loan documents you signed do not specify otherwise, it is most likely that you have effectively personally guaranteed 100% of the loan, meaning the bank may try to go after you and your partner ...
- 41.5k
14
votes
If a company that doesn't pay dividends makes a large profit, where does it go?
They may keep the cash sitting in a bank somewhere as a cash reserve. They may invest it in stocks or bonds in other companies or in government units. They may invest in new factories or equipment. ...
- 22k
13
votes
Who receives the money when one company buys another?
It's tempting to think of a corporation as a real thing, because in many respects it seems to be. But it isn't a corporeal thing (despite the root word of the name). It may own corporeal things, and ...
- 1,857
12
votes
CEO entitlement from share ownership?
You can apply for a position with any company you like, whether or not you are a shareholder.
However, owning shares in a company, even lots of shares in a company, does not entitle you to having ...
- 115k
10
votes
Accepted
Why should a company go public?
You go public to raise money, to invest in the business and/or pay off the existing shareholders. It's really as simple as that. The advantage of being public is that your shares can easily be bought ...
- 22.9k
8
votes
What does this diagram from Robert Kiyosaki about corporations mean?
It looks like RK is encouraging tax fraud. Suggesting that one have their business cover personal expenses sounds like the advice that got Leona Helmsley in hot water.
8
votes
CEO entitlement from share ownership?
If I own shares of a company, am I entitled to apply as position of
CEO?
Sure, but anybody else can apply too.
Who decides?
The corporate board of directors, who are nominally chosen by a vote ...
- 12.4k
8
votes
What is the advantage to a company (airline, retailer, etc.) of having a branded credit card?
The airline might get a commission per customer from the credit card company
It's a way for the airline to retain you as a customer. By giving you all those loyalty benefits they prevent you from ...
- 23.8k
8
votes
Bank loan responsibility for corporation partners
Because you made a personal guarantee, both of you and the corporation are jointly and severally responsible for 100% of the loan.
That means the bank will dun both of you. If he refuses to pay any,...
7
votes
Accepted
What is the advantage to a company (airline, retailer, etc.) of having a branded credit card?
From a company (airline/hotel/retailer) perspective, here are some advantages:
Branding - Having a cobranded card is a branding exercise. If the rewards program is good and the issued cards are ...
- 1,095
7
votes
Where is my principal place of business UK based?
There are many options when it comes to choosing a registered office address. I personally used one of the many companies that offer a "Registered office Service" so that I had a Central London ...
- 311
7
votes
Accepted
Why is investment income generated in a corporation taxed at a higher rate than when it is generated for an individual?
I'm going to avoid going too deep into the technical on this.
In short, Canada's tax system is set up under the theory of 'integration', which means that an individual should have no tax benefit, and ...
- 41.5k
7
votes
Does it make sense to set up a corporation in Ireland to protect your wealth?
To put this in perspective: you can certainly set up a corporation and then pass legitimate business expenses related to the operation of that corporation through it in the manner you're describing. ...
- 17k
7
votes
To what extent are companies' owners not responsible to pay back money that they waste?
A small business' bank loans and credit cards all require a personal guarantee by the owner, in addition to the business' promise to pay.
Large businesses can get a loan with no personal guarantee. In ...
6
votes
Accepted
What amount of money can a corporation spend on entertainment
There is no simple rule like "you can/can't spend more/less than $X per person." Instead there is a reasonableness test. There is such a thing as an audit of just your travel and entertainment ...
- 12.7k
6
votes
Company is late in paying my corporate credit card statement - will it hurt my credit?
According to an article on Bankrate.com from 2011, yes, it can hurt your credit:
With individual liability accounts, the employee holds all responsibility for the charges, even if the company pays ...
- 115k
6
votes
What does this diagram from Robert Kiyosaki about corporations mean?
These types of diagrams appear all throughout Kiyosaki's Rich Dad, Poor Dad book. The arrows in the diagrams represent cash flow.
For example, the first two diagrams of this type in the book are:
...
- 115k
6
votes
Accepted
Why 1099-MISC for LLC but not a corporation?
Corporations file their own tax returns and have their own, more rigorous, reporting requirements and standards so they are relatively easier to audit (Imagine 1 corporate audit vs 1,000 single-member ...
- 68.6k
5
votes
Accepted
Saving personal income tax from job using corporation
No, if the app company is declaring expenses of things that aren't really business expenses that would be fraud or similar.
And if the app company gives you things of value for personal use, e.g. ...
- 226
5
votes
Accepted
Company is late in paying my corporate credit card statement - will it hurt my credit?
After doing some investigating, my employers contract with the credit card company has a clause that basically specifies that despite my name being on the credit card, and bills being sent to me, all ...
- 660
5
votes
Accepted
Is there a minimum limit where a limited company can pay zero corporation tax?
Your tax rate is 20% for turnover below £300000. So deducting your expenses and all the tax your accountant thinks you need to pay is £450. But you can claim relief on your tax payments. Visit the UK ...
- 10.6k
5
votes
Is there a standard ratio of preferred shares to common shares in a company?
standard ratio of preferred shares to common shares in a company?
There is no standard ratio, a company may choose to issue preferred shares if it needs to raise capital fast and can't get more debt
...
- 57k
5
votes
Accepted
Are wages from a corporation always immediately tax deductible?
Your intuition, as you suspected, is wrong in this case.
...when are wages not immediately expensable?
When the wages are used for construction of a new capital asset. Generally, labor for new ...
- 47.1k
Only top scored, non community-wiki answers of a minimum length are eligible