AuditBible
December 15, 2017, 06:22:59 AM *
Welcome, Guest. Please login or register.
Did you miss your activation email?

Login with username, password and session length
Google
 
   Home   News Alerts Help Search Calendar Members Contributions Staff List Login Register  

Del.icio.us Digg FURL FaceBook Stumble Upon Reddit SlashDot Google Bookmarks

Pages: 1   Go Down
  Add bookmark  |  Print  
Author Topic: Common Stock vs. Preferred Stock  (Read 2459 times)
 
0 Members and 1 Guest are viewing this topic.
beancounter
Administrator
*****
Offline Offline

Gender: Male
Experience: 1985
Posts: 168



Activity
100%


View Profile WWW
« on: January 29, 2009, 01:37:16 PM »

Have you ever had an audit where they provided the percentages of Common Stock and Preferred Stock when detailing the ownership of the company?

While "Preferred" stockholders don't have any voting rights and, therefore, no control...both types denote ownership in the company.

Since neither the CA labor code nor the USRP differentiate between them, we should combine both types in order to determine the individual percentages of ownership for each officer.  This is true for determining who can be excluded, as well as determing the similarity of ownership for the possible combination of entities for experience rating purposes.
« Last Edit: February 11, 2009, 12:24:52 PM by auditor1 » Logged

bc
AuditorBob
Global Moderator
*****
Offline Offline

Gender: Male
Experience: 1984
Posts: 73



Activity
0%

"Ehh, what's up, doc?"


View Profile WWW
« Reply #1 on: January 30, 2009, 12:19:59 PM »

Here's a recent example...nothing tricky on this one.  If the policyholder had only provided me with the details of their Common Stock, it wouldn't have made a difference as all three were endorsed to be excluded.  However, if they had only provided me with the details of their Preferred Stock, I would have included Jack as not being an owner.

By the way, in this example, John and Jane were president and VP, respectively; and Jack was a director.  While directors who own stock can be excluded from the policy, they are not subject to the officer minimums and maximums if they are included.  So if I only had knowledge of their Preferred Stock, I would have included him at his actual payroll, which exceeded the officer maximum limitation.

After totaling the percent of ownership for both types of stock for each officer, I then divided the total for each by 200% to obtain their overall ownership in the company.
« Last Edit: February 11, 2009, 12:25:11 PM by auditor1 » Logged

Bob
Pages: 1   Go Up
  Add bookmark  |  Print  
 
Jump to:  

Related Topics
Subject Started by Replies Views Last post
Directory of Nurserymen and Others Licensed to Sell Nursery Stock in California Agricultural beancounter 2 3755 Last post March 19, 2008, 01:55:31 PM
by beancounter
MOVED: Directory of Nurserymen and Others Licensed to Sell Nursery Stock in Cali Mercantile beancounter 0 2026 Last post March 19, 2008, 01:56:03 PM
by beancounter
Restricted Stock Units (RSUs) Manual Rules & Legislation beancounter 0 1218 Last post March 10, 2016, 03:50:58 PM
by beancounter
Unique Hits: 1830247
Powered by MySQL Powered by PHP Powered by SMF 1.1.21 | SMF © 2015, Simple Machines
AuditBible © 2008 | Sitemap
Valid XHTML 1.0! Valid CSS!