illegal? Concealing debt By using SPEs‚ Enron’s balance sheet understated its liabilities and overstated its equity and earnings. Enron disclosed to its shareholders that it had hedged downside risk in its illiquid investments using special purpose entities which were lies. Enormous spending Extravagant expenses were rampant in the company which included enormous salary expenses. In 2000‚ the top 200 highest-paid employees received $1.4 billion based on inflated operating results. Insider
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people to finance and operate a business. Partnerships‚ unlike sole proprietorships‚ are entities legally separate from the partners themselves. In a general partnership‚ however‚ profits and losses flow through to the partners’ tax returns. Each general partner has equal responsibility and authority to run the business. Each partner should be involved in day-to-day operations of the business‚ and should make management decisions. Any partner may represent the business without the knowledge of the
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Introduction There are many different forms of business entities available‚ a recent one being limited liability partnerships (LLP)‚ created by the Limited Liability Partnership Act 2000 (LLPA). This act came into force on the 6th of April 2001. As‚ LLP’s have qualities similar to partnerships‚ they are seen as a hybrid between a partnership and a company. An LLP is a ‘corporate body’ with ‘separate legal personality’‚ distinct from its members. Members enjoy limited liability and are not jointly
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each individual can be sued for the full amount of the business debt. The partners cannot have personal interest within the partnership (Bagley & Savage‚ 2009 p. 729). If one partner incurs all of the debt‚ they can then sue the other partners for their parts of the debt. Within a Limited Liability Partnership these three items would differ from the general partnership. 1. Limited partners do not play an active role in the business 2. Limited partners are not personally liable
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Limited Liability Partnership Limited Liability Partnership entities‚ the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act‚ 2008. A There are no sources in the current document.Limited Liability Partnership‚ popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner ’s misconduct or negligence;
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each has only two classes of partners Creation of Partnership 1. 2. 3. 4. Association of 2 or more persons Carrying on a business co-ownership (share profits and management) For profit 1. Association of 2 or more persons Note that no person may be forced to be a partner of another person. Persons can be other entity types 2. Carrying on a business Any type of business will suffice co-ownership (share profits and management) sharing profits is the most important factor establishing a partnership
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STARTING A SMALL BUSINESS | P4&M3 | UNIT 36 STARTING A SMALL BUSINESS | Contents INTRODUCTION 2 Proposed legal structure of the business 2 LEGAL ASPECTS 2 Local licenses and regulations 4 The implications for the business in legal aspect (M3) 4 FINANCIAL ASPECTS 5 The implications for the business in financial aspect (M3) 8 INTRODUCTION For this task I have been asked to describe the legal and financial aspects that will affect start-up of the business Proposed legal
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could only report the information that help to increase profit if the disclosure is under company’s discretion. The interest underlying in the information will ultimately decides what actions company will take. This article will first explain why entities decide to disclose social and environmental information. Then several characteristics of company that are strongly associated with disclosure will be introduced. Methods used to improve the quality of report will also be discussed. Finally‚ whether
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unlimited. 2. Leigh wants to go into the business of construction contracting. Among the reasons that would probably convince Leigh to set up his business as a sole proprietorship would be a. its greater organizational flexibility. b. its limited liability. c. its perpetual existence. d. the ease of transferring the business to other family members. 3. Kelly‚ the owner of Llama Farms‚ a sole proprietorship‚ wants to obtain additional business capital but to maintain control. This can best
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comparing between different types of entities. • One question will be some individuals who want to form an entity‚ and you should choose one and elaborate. • You should treat the test as if you were responding in memo form to an attny who already knows some info on the subject so you do not need to cite the code and provide the entire quoted section of the corporation. • Another question might be a fact scenario that asks for your recommendation on the best business format with the advantages
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