Issues with different forms of business

• What is the liability of partners in a limited liability company?

  Liable only for their investment
• How does liability differ in an unlimited liability company?

  Owners are personally accountable for liabilities
• What is the statutory definition of "ordinary share capital"?

  All issued share capital excluding fixed-rate dividends
• What does market capitalization represent?

  Total value of a company's outstanding shares
• How is market capitalization calculated?

  Market price per share times shares outstanding
• What is a dividend?

  A payment to shareholders from profits
• Can dividends be counted as business costs for Corporation Tax?

  No, they cannot be counted as costs
• What restriction exists on dividend payments by a company?

  Must not exceed available profits
• What are the key characteristics of limited and unlimited liability companies?

  • Limited liability: Partners liable only for investment
  • Unlimited liability: Owners personally accountable for debts
• What are the components of market capitalization?

  • Market price per common share
  • Number of common shares outstanding
• What are the rules regarding dividends and Corporation Tax?

  • Dividends cannot be counted as business costs
  • Must not exceed available profits from current and previous years