ADM 1340 Lecture Notes - Lecture 18: Retained Earnings, Initial Public Offering, Authorised Capital

• School: University of Ottawa
• Department: Administration
• Course: ADM 1340
• Professor: Lamia Chourou

Document Summary

Corporation = legal entity that is separate and distinct from its owners. > pro t or non pro t, public or privately owned. Separate legal existence = entity separate and distinct from owners, Limited liability of shareholders = you get whatever you put in. Transferable ownership rights = shares, which are transferable units. > corporations have a easy ability to raise capital, have continuous life, have bod, have to abide by government regulations, they pay an income tax. Rights of common shareholders: 1. vote 2. get dividends 3. residual claim (receive what is left after everyone else is paid) Preferred shares: dividend preference: priority claim over common shares on distribution of dividends, liquidation preference: priority claim over common shares on corporate assets if the corporation fails, other preferences: convertible preferred shares, redeemable preferred shares, retractable preferred shares. > number of authorized shares a corporation is authorized to sell is indicated in its articles of incorporation.