This document provides an overview of the key steps to building a business, including establishing an entity structure, understanding government rules and regulations, and ensuring ongoing compliance. It discusses the different types of entity structures like corporations, LLCs, and sole proprietorships. It also outlines the various levels of government regulations from federal to state to local and the different types including professional licensing, location-based rules, and activity-specific regulations. The document emphasizes the importance of staying organized, using proper documentation and formalities, and addressing any regulatory compliance concerns.
Fundamentals of Corporate Finance, 2e ROBERT PARRINODustiBuckner14
Fundamentals of Corporate
Finance, 2/e
ROBERT PARRINO, PH.D.
DAVID S. KIDWELL, PH.D.
THOMAS W. BATES, PH.D.
Chapter 1: The Financial Manager and
the Firm
Learning Objectives
1. IDENTIFY THE KEY FINANCIAL DECISIONS
FACING THE FINANCIAL MANAGER OF ANY
BUSINESS FIRM.
2. IDENTIFY THE BASIC FORMS OF BUSINESS
ORGANIZATION IN THE UNITED STATES AND
THEIR RESPECTIVE STRENGTHS AND
WEAKNESSES.
Learning Objectives
3. DESCRIBE THE TYPICAL ORGANIZATION OF
THE FINANCIAL FUNCTION IN A LARGE
CORPORATION.
4. EXPLAIN WHY MAXIMIZING THE CURRENT
VALUE OF THE FIRM’S STOCK IS THE
APPROPRIATE GOAL FOR MANAGEMENT.
5. DISCUSS HOW AGENCY CONFLICTS AFFECT
THE GOAL OF MAXIMIZING SHAREHOLDER
VALUE.
Learning Objectives
6. EXPLAIN WHY ETHICS IS AN APPROPRIATE
TOPIC IN THE STUDY OF CORPORATE
FINANCE.
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Capital Budgeting: decide which long-term
assets to acquire
• Financing: decide how to pay for short-term and
long-term assets
• Working Capital: decide how to manage short-
term resources and obligations
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Capital Budgeting
Choose the long-term assets that will yield the greatest
net benefits for the firm.
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Financing
Finance assets with the optimal combination of short-
term debt, long-term debt, and equity.
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Working Capital Management
Adjust current assets and current liabilities as needed
to promote growth in cash flow.
Cash Flows Between the Firm and Its
Stakeholders and Owners
How the Financial Manager’s Decisions
Affect the Balance Sheet
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Poor decisions about capital budgeting,
financing, or working capital may lead to
bankruptcy or business failure
Basic Forms of Business Organization
o BUSINESS STRUCTURE
• Sole Proprietorship
• Partnership
• Corporation
Basic Forms of Business Organization
o SOLE PROPRIETORSHIP
• Owned by a single person who is financially
responsible for the actions and obligations of
the business
Basic Forms of Business Organization
o SOLE PROPRIETORSHIP
• Advantages
easiest to create
easiest to control
easiest to dissolve
right to all profit
Basic Forms of Business Organization
o SOLE PROPRIETORSHIP
• Disadvantages
owner’s personal assets at risk
owner’s unlimited liability for firm obligations
equity only from owner or business profit
business income taxed as personal income
difficult to transfer ownership
Basic Forms of Business Organization
o PARTNERSHIP
• A business owned by more than one person; one
or more of them financially responsible for the
actions and obligations of the business
Basic Forms of Business Org ...
LLC Formation and Operation; How to Draft the LLC Operating AgreementBradley Miller
Keynote slides from my 2-part continuing legal education (CLE) presentation LLC Formation and Operation, and How to Draft the LLC Operating Agreement. Presented December 12, 2016 in Columbus, Ohio for the National Business Institute, Inc. (NBI) seminar LLCs From Start to Finish.
Fundamentals of Corporate Finance, 2e ROBERT PARRINODustiBuckner14
Fundamentals of Corporate
Finance, 2/e
ROBERT PARRINO, PH.D.
DAVID S. KIDWELL, PH.D.
THOMAS W. BATES, PH.D.
Chapter 1: The Financial Manager and
the Firm
Learning Objectives
1. IDENTIFY THE KEY FINANCIAL DECISIONS
FACING THE FINANCIAL MANAGER OF ANY
BUSINESS FIRM.
2. IDENTIFY THE BASIC FORMS OF BUSINESS
ORGANIZATION IN THE UNITED STATES AND
THEIR RESPECTIVE STRENGTHS AND
WEAKNESSES.
Learning Objectives
3. DESCRIBE THE TYPICAL ORGANIZATION OF
THE FINANCIAL FUNCTION IN A LARGE
CORPORATION.
4. EXPLAIN WHY MAXIMIZING THE CURRENT
VALUE OF THE FIRM’S STOCK IS THE
APPROPRIATE GOAL FOR MANAGEMENT.
5. DISCUSS HOW AGENCY CONFLICTS AFFECT
THE GOAL OF MAXIMIZING SHAREHOLDER
VALUE.
Learning Objectives
6. EXPLAIN WHY ETHICS IS AN APPROPRIATE
TOPIC IN THE STUDY OF CORPORATE
FINANCE.
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Capital Budgeting: decide which long-term
assets to acquire
• Financing: decide how to pay for short-term and
long-term assets
• Working Capital: decide how to manage short-
term resources and obligations
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Capital Budgeting
Choose the long-term assets that will yield the greatest
net benefits for the firm.
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Financing
Finance assets with the optimal combination of short-
term debt, long-term debt, and equity.
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Working Capital Management
Adjust current assets and current liabilities as needed
to promote growth in cash flow.
Cash Flows Between the Firm and Its
Stakeholders and Owners
How the Financial Manager’s Decisions
Affect the Balance Sheet
The Role of the Financial Manager
o THREE KEY FINANCIAL DECISIONS
• Poor decisions about capital budgeting,
financing, or working capital may lead to
bankruptcy or business failure
Basic Forms of Business Organization
o BUSINESS STRUCTURE
• Sole Proprietorship
• Partnership
• Corporation
Basic Forms of Business Organization
o SOLE PROPRIETORSHIP
• Owned by a single person who is financially
responsible for the actions and obligations of
the business
Basic Forms of Business Organization
o SOLE PROPRIETORSHIP
• Advantages
easiest to create
easiest to control
easiest to dissolve
right to all profit
Basic Forms of Business Organization
o SOLE PROPRIETORSHIP
• Disadvantages
owner’s personal assets at risk
owner’s unlimited liability for firm obligations
equity only from owner or business profit
business income taxed as personal income
difficult to transfer ownership
Basic Forms of Business Organization
o PARTNERSHIP
• A business owned by more than one person; one
or more of them financially responsible for the
actions and obligations of the business
Basic Forms of Business Org ...
LLC Formation and Operation; How to Draft the LLC Operating AgreementBradley Miller
Keynote slides from my 2-part continuing legal education (CLE) presentation LLC Formation and Operation, and How to Draft the LLC Operating Agreement. Presented December 12, 2016 in Columbus, Ohio for the National Business Institute, Inc. (NBI) seminar LLCs From Start to Finish.
This is an asset protection presentation for a client who owned several small businesses and several parcels of real estate. This presentation is unique to that client.
Youtube Video link -
https://youtu.be/QxQYccE9PL0
DIRECTOR – According to Companies Act, A director may be defined as a person having control over the direction, conduct, management or superintendence of the affairs of a company. Anyone one who is in the power to perform the duties and responsibilities of a director will be called as director by virtue of his function irrespective of, by what name he is called.
BOARD OF DIRECTORS - A board of directors include all directors elected by a corporation's shareholders to represent their interests and ensure that the company's management acts on their behalf. The Board has extensive power to manage a company, delegate decision making power to executives and ensure that company’s objectives are achieved in compliance with the provisions of the Articles of Association. The board shall exercise its power subject to provisions contained in Articles, Memorandum, Central Govt. and Company law board.
EXECUTIVE DIRECTOR – The full time working director of the company responsible towards shareholder’s interest and company’s profitability.
NON-EXECUTIVE DIRECTOR – They are not involved in everyday working of the company. They take part in planning, policy-making and attends board meeting of the company.
INDEPENDENT DIRECTOR – They are the directors who do not have any relationship with the company which might influence their decisions or judgments. They are the person with integrity, experience and expertise.
NOMINEE DIRECTOR – They are appointed in a company to ensure that the affairs of the company are conducted in a manner dictated by the laws governing companies and there is no oppression or mismanagement.
ALTERNATE DIRECTOR – Appointed to attend, speak and vote in a board meeting on behalf of the director of a company who would be unable to attend.
Thank You For Watching
Subscribe To DevTech Finance
This presentation explains about the legal position of directors.
Directors are the persons duly appointed by the company to direct and manage the affairs of the company.
Their legal position is sometimes described as agents, sometimes as managing partners, and sometimes as trustees.
It is a presentation on basic introduction to the subject of CLSP - Documents of a Company.
This is published only for education and information purpose.
This is an asset protection presentation for a client who owned several small businesses and several parcels of real estate. This presentation is unique to that client.
Youtube Video link -
https://youtu.be/QxQYccE9PL0
DIRECTOR – According to Companies Act, A director may be defined as a person having control over the direction, conduct, management or superintendence of the affairs of a company. Anyone one who is in the power to perform the duties and responsibilities of a director will be called as director by virtue of his function irrespective of, by what name he is called.
BOARD OF DIRECTORS - A board of directors include all directors elected by a corporation's shareholders to represent their interests and ensure that the company's management acts on their behalf. The Board has extensive power to manage a company, delegate decision making power to executives and ensure that company’s objectives are achieved in compliance with the provisions of the Articles of Association. The board shall exercise its power subject to provisions contained in Articles, Memorandum, Central Govt. and Company law board.
EXECUTIVE DIRECTOR – The full time working director of the company responsible towards shareholder’s interest and company’s profitability.
NON-EXECUTIVE DIRECTOR – They are not involved in everyday working of the company. They take part in planning, policy-making and attends board meeting of the company.
INDEPENDENT DIRECTOR – They are the directors who do not have any relationship with the company which might influence their decisions or judgments. They are the person with integrity, experience and expertise.
NOMINEE DIRECTOR – They are appointed in a company to ensure that the affairs of the company are conducted in a manner dictated by the laws governing companies and there is no oppression or mismanagement.
ALTERNATE DIRECTOR – Appointed to attend, speak and vote in a board meeting on behalf of the director of a company who would be unable to attend.
Thank You For Watching
Subscribe To DevTech Finance
This presentation explains about the legal position of directors.
Directors are the persons duly appointed by the company to direct and manage the affairs of the company.
Their legal position is sometimes described as agents, sometimes as managing partners, and sometimes as trustees.
It is a presentation on basic introduction to the subject of CLSP - Documents of a Company.
This is published only for education and information purpose.
How to Obtain Permanent Residency in the NetherlandsBridgeWest.eu
You can rely on our assistance if you are ready to apply for permanent residency. Find out more at: https://immigration-netherlands.com/obtain-a-permanent-residence-permit-in-the-netherlands/.
Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
Military Commissions details LtCol Thomas Jasper as Detailed Defense CounselThomas (Tom) Jasper
Military Commissions Trial Judiciary, Guantanamo Bay, Cuba. Notice of the Chief Defense Counsel's detailing of LtCol Thomas F. Jasper, Jr. USMC, as Detailed Defense Counsel for Abd Al Hadi Al-Iraqi on 6 August 2014 in the case of United States v. Hadi al Iraqi (10026)
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
Car Accident Injury Do I Have a Case....Knowyourright
Every year, thousands of Minnesotans are injured in car accidents. These injuries can be severe – even life-changing. Under Minnesota law, you can pursue compensation through a personal injury lawsuit.
ALL EYES ON RAFAH BUT WHY Explain more.pdf46adnanshahzad
All eyes on Rafah: But why?. The Rafah border crossing, a crucial point between Egypt and the Gaza Strip, often finds itself at the center of global attention. As we explore the significance of Rafah, we’ll uncover why all eyes are on Rafah and the complexities surrounding this pivotal region.
INTRODUCTION
What makes Rafah so significant that it captures global attention? The phrase ‘All eyes are on Rafah’ resonates not just with those in the region but with people worldwide who recognize its strategic, humanitarian, and political importance. In this guide, we will delve into the factors that make Rafah a focal point for international interest, examining its historical context, humanitarian challenges, and political dimensions.
7. ENTITY
STRUCTURE
C O N TA I N E R F O R T H E B U S I N E S S
LIABILITY SHIELD
SHOW SEPARATION
8. • Corporation
• Limited Liability
Company
• Partnerships
• Sole Proprietor
• C Corporations
• S Corporations
• Partnerships
• Sole Proprietor
LEGAL TAX
10. TWO TYPES OF LLC’S
MEMBER-MANAGED
All owners directly manage
the business and
operations of the Company.
MANAGER-MANAGED
A manager or managers run
the business and report to
the owners.
AMBR = Authorized
Member
MGR = Manager
12. Set-Up Correctly – Have required documents
Annual Report
Annual Minutes/Consents
Bank Account
Co-Mingling of Funds
Use of Titles
FORMALITIES
**ACTIONS MUST BE DOCUMENTED.
15. TYPES
LEVELS
• Federal Government
• State Government
• Local Government
• Professional Regulation
• Location-Based Regulation
• Activity Regulation
17. LOCATION BASED
REGULATION
• Business Tax Receipt
http://www.coj.net/department
s/tax-collector/local-business-
tax.aspx
• Certificate of Use
http://www.coj.net/couapplicati
on.aspx
• City of Jacksonville
http://www.coj.net/categories/
business.aspx
Regulates
businesses in a
specific
geographic
location.
CITY/COUNTY
LEVEL
The Established Flyers: Most of our clients come to us once they’ve been in business for several years. They started their firms and took a lot of risks at the beginning. They were comfortable figuring things out as they went along – but they knew there were things they didn’t know. The challenge was that there was so much to focus on that they had to choose the priority that made them money. They knew that they needed to do things legally sound but there wasn’t resources to put everything in place. Now they want to stabilize and they know it’s time to put some foundations in place. No more building with toothpicks and bandaids – they know their growth needs to be supported by strong infrastructure. So they come to us to help them put that structure in place. They can then continue to grow without fear of collapse.
The Start-Off the Grounders: Just a few of our clients are start-ups. But they are special start-ups – the kind that know they need to build infrastructure and they want it in place before (or shortly after) they start. They don’t accept as much risk. These are the types of personalities who like to have everything lined up so they don’t have to worry. They want to build from the ground up. These are the only start-ups we serve because they know that the structure we offer is important and they are willing to prioritize getting it done.
Why Should You Build Infrastructure?
It builds strength in your foundation so your business can support growth.
It promotes good business by creating successful business relationships (through solid and honest contracts).
It allows you to avoid problems, and for those that are unavoidable it can help you find an easier resolution.
It increases the value of the business, which is great for when it’s time to make a transition.
You’ll be drinking from a fire hose in this class.
It will be a lot of information.
You will experience some overwhelm and discouragement.
It’s important to know what needs to be done.
Not that you have to run out and do it all at one time.
You’ll have a list of issues you will need to address.
I want you to pick ONE THING to tackle before this class ends.
The other issues on your list will go on your calendar.
You’ll pick them up and deal with them at certain points in the future.
You’ll make your decisions on what to do first based on your own priorities and circumstances.
Terminology
Client vs. Customer
Contract vs. Agreement
Company vs. Business
Government makes rules that all businesses must follow. Government could be the States, the Federal Government, or local governments (counties and cities). We’re going to talk about these first. Not the most fun – but probably the most critical. You’ll find out why.
This area of infrastructure is to make sure that your business complies with all the regulations that apply to you. It’s daunting, no doubt. There are many rules to follow and determining which ones apply to you isn’t always easy.
No matter your philosophical view of the regulation of businesses, the reality is that businesses have multiple layers of rules to follow. And we all must follow them whether we like them or not. Most professional service providers want to follow the rules – they just have trouble determining what they are, or they misunderstand what they mean. This is where a knowledgeable business attorney can help you sort it out.
At the state level – we have the creation of business entities.
Each state is different – with different rules.
The purpose of these rules is to allow people to have a “container” for their business.
I say “container” because it truly contains the business inside it.
It contains the good – and it contains the bad.
Flip chart – Draw box. Draw owners.
The container protects the owners from any liability from the business. We call this the “liability shield”.
If you set up your entity correctly- and you maintain it correctly – your entity will have a liability shield in place to protect you.
Most businesses have some level of regulatory compliance. How much you may have depends on where you are located and what type of services you provide.
If you add all of those up, it’s a lot. Small businesses frequently complain about all they need to learn and the lack of public resources to help them. Most of the time the information is freely available. However, finding your specific answer and then understanding the language of the rules – well that’s a different story.
