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Profit prior to incorporation - Commerce Video Lecture
FAQs on Profit prior to incorporation - Commerce Video Lecture
| 1. What is profit prior to incorporation? |  |
Ans. Profit prior to incorporation refers to the earnings generated by a business before it has been officially incorporated or registered as a separate legal entity. It includes any income or revenue earned during the pre-incorporation phase.
| 2. How is profit prior to incorporation calculated? | |
Ans. Profit prior to incorporation is calculated by subtracting the total expenses incurred during the pre-incorporation phase from the total revenue generated. This includes any costs related to product development, marketing, legal fees, and other expenses.
| 3. Can profit prior to incorporation be distributed to shareholders? | |
Ans. No, profit prior to incorporation cannot be distributed to shareholders because the business has not yet been officially incorporated. Once the company is incorporated, profits can be distributed among shareholders as dividends or reinvested into the business.
| 4. Why is profit prior to incorporation important? | |
Ans. Profit prior to incorporation is important as it provides an indication of the business's potential profitability and financial viability. It helps stakeholders, such as potential investors and lenders, assess the business's performance during its early stages and make informed decisions.
| 5. How is profit prior to incorporation different from post-incorporation profit? | |
Ans. Profit prior to incorporation is the profit earned by a business before it has been officially incorporated. It represents the financial performance during the pre-incorporation phase. On the other hand, post-incorporation profit refers to the earnings generated after the business has been incorporated and is legally recognized as a separate entity.
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Nov 16, 2024 Last updated |
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