MGCR 211 Lecture Notes - Lecture 13: Retained Earnings, Treasury Stock, Limited Liability
3 Sep 2016
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Document Summary
Business and the owner are the same legal entity, unlimited liability. Two or more owners with a partnership agreement. General partner runs the business, while limited partners invest in the business. Limited partners share in profits and losses but can usually not be sued. Organization is legally separate from the owners (shareholders) Subject to corporate taxation, and requires extra accounting and legal fees. Has extra administrative requirements (book keeping, financial statements) Companies may be incorporated under federal or provincial law. Authorized shares the maximum number of shares that can be issued. Issued shares- have been sold by the company. Legal capital- amount received for shares, can not be paid as dividends. Share in profits and losses (and assets on liquidation) Cumulative preferred shares can carry over dividends from year to year. Convertible preferred shares can be converted to common shares. Redeemable preferred shares can be bought back by the company.
