Liquidity of Investment
The ease of selling one’s investment in a publicly held corporation is one of the major 1_________ of the corporate form. Theoretically the minority shareholders in a close corporation can also sell their 2________. However, unless at least a seat on the board of directors can be obtained through cumulative voting, there may be little that is attractive to a 3_______ buyer. Shareholders of the corporation have little incentive to buy out the minority interest because of the freeze-out potential discussed earlier. Shareholders in close corporations are often 4_________ in the sale of their stock. This may also make the investment less marketable and therefore less 5________. General partners can sell their partnership interests but the purchaser does not become a partner unless he or she is accepted 6___________ by the other general partners into what is essentially a new partnership. The partner who wants to sell out before the end of the agreed-on term of the partnership is in a weak bargaining position. Unless the partnership agreement changes the generally prevailing rules, such a partner is not entitled to force the partnership business to be liquidated. Nor is the departing partner entitled to share in the goodwill value of the 7_________ if the other partners exercise their right to continue it. Limited partnership interests can be sold without such adverse effects; however, there seldom is a public market, such as a stock exchange, where they can be sold. Publicly offered partnership interests generally are designed to serve as tax shelters for the original purchasers during the early years of ownership and are generally 8___________ to investors during their later years. 4.4. Critical Thinking & Discussion Questions: 4.4.1. Discuss the following quotes: v v When one door is closed, don’t you know, another is open. – Bob Marley v He who does not get fun and enjoyment out of every day... needs to reorganize his life. – George M. Adams
4.5.1. Web Activities: I. Company Development. You have an opportunity to compare the content of different company’s Websites. Taking into consideration that so much of Webspace is available via unrestricted access, visitors have a unique opportunity to identify and explain key knowledge of each company story. For the purposes of this task, collect as much information as you can. Go to the company’s Websites and explore the content of two the most attractive. Suggestions for suitable sites can be found in the Indexes of Websites (Appendix D). Fill in an Internet-questionnaire.
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The achievements of an organizationare the results of the combined effort of each individual. – Vince Lombardi
