ARBUS102 Lecture Notes - Initial Public Offering, Legal Personality, Treasury Stock
Document Summary
A corporation is a separate legal entity. Disadvantage: creating a corporation can be expensive. Advantage: a corporation limits the legal liability of owners and provides a method of raising money by selling shares. A common share is the basic voting share issued by a corporation to shareholders. A share in any assets after creditors have been paid (not that great because they get paid last in a bankruptcy) Authorized shares is the maximum number of shares that can be issued, as specified in the corporation"s charter: usually the number of authorized shares is unlimited . Issued shares have been distributed by the corporation. Outstanding shares are currently held by shareholders: usually issued shares and outstanding shares are the same number unless the company is in the process of repurchasing shares. Treasury shares are issued shares that have been reacquired by the company.