Managerial Finance Essay

Students Name Students Number Instructors Name QUESTION ONE The Limited Liability Partnership is the one that allows investors to limit their liability. The partnership agreement drawn and agreed on by the partners spells out the duties and responsibilities for each partner. It also shows the contribution of each partner towards the capital used to start the business. If the business incurs losses the liability is shared by all the partners and it does not fall on one. They also share profits equally or based on the contribution of each, but this is usually agreed on when writing the partnership agreement. Also the duties and responsibilities in the day to day running of the business are shared equally among the partners (Gray, 2000). This however does not shield any partner who gets involved in wrong and negligent acts from being liable. If any of the partners commits errors, omissions or any malpractice he is personally liable for the losses such acts causes the business. QUESTION TWO Insider trading occurs when individuals with access to nonpublic information on a listed company participate in the trading of its shares and stocks based on this information. These individuals include employees and directors of a company who get access to this information in the normal course of their duties in the company. Such employees may be privy to secret information on the company or its competitors on matters like mergers, acquisitions or maybe share splits. If they dispose or increase their shareholding based on such information which is not yet in the public domain, they will be liable of insider trading. The government agency responsible for protecting against this unethical behavior is The Securities and Exchange Commission. They re...