Corporate Finance

 sole proprietorship (entreprise individuelle): most common form of company, the business and run by
the person who created the firm (OWNER=CONTROL) (few if any employees), easy to create from a legal
perspective. But no separation ownership/control and unlimited personal liability.
 partnership (société en nom collectif): similar to SP but with more than one owner. All partners are
liable for all the firm’s debt and you can have to repay all of firm’s outstanding debts. It ends when ONE
partner withdraws. Two types of owners: general partners and limited partners (limited liability – they
cannot lose more money than their investment). They don’t pay taxes, only the partners pay because they
perceive the profits.
 Limited Liability Company (LLC – SARL): limited liability to their investment (not personally liable).
OWNERSHIP/CONTROLER (but can be equal). Private LLC’s aren’t allowed to share their shares on stock
markets, but Public LLC’s can.
 Corporation (SA): judicial person, most important form. Legal entity separate from its owners. It has
legal powers and it is responsible for its own obligations, not the owners. They can choose where to
incorporate (taxes…) but the headquarters mustn’t be at the same place. Each owner has a stock (shares
of the equity of the company). The sum of all ownership/shares is the equity. No limit of shareholders.
Owner is entitled to dividend! SA pays taxes because OWNER/CORPORATION and then owners pay taxes
through their dividend (double taxation).
After everything has been paid (all but government and owners), the company decides to distribute
through dividend, which is income for the owner, so he’ll pay taxes on that. Dividend is always paid after
taxes!