Business Administration 2257 Chapter Notes - Chapter 11: Treasury Stock, Capital Account, Initial Public Offering
20 Nov 2016
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Chapter 11 reporting and analyzing shareholder"s equity. Corporation a legal entity that is separate and distinct from the owners (i. e. shareholders. Public corporation: may have thousands of shareholders, shares are traded on the stock exchange offered to general public. Private corporation: closely held corporation , only a few shareholders, shares are not offered to the general public. Limited liability of shareholders: the liability of the shareholders are limited to their initial investments, shareholders cannot be forced to pay for the companies debts. Transferable ownership rights: ownership of the corporation is determined by share capital, share capital is transferable by selling, selling shares does not require approval by the corporation. Ability to acquire capital: easy to obtain capital by issuing shares. Continuous life: corporations have an unlimited life. Corporation management: shareholders do not manage the company themselves, they manage indirectly through the board of directors.
