MIS 302F Lecture Notes - Lecture 3: Certified Public Accountant, Legal Personality, Accounting Equation

• School: UT-Austin
• Department: Management Information Systems
• Course: MIS 302F
• Professor: Tuttle Clint

Document Summary

A business organized as a separate legal entity under state corporation law and having ownership divided into transferable shares of stock is a corporation. The holders of the shares (stockholders) enjoy limited liability; that is, they are not personally liable for the debts of the corporate entity. Stockholders may transfer all or part of their ownership shares to other investors at any time (i. e. , sell their shares). The ease with which ownership can change adds to the attractiveness of investing in a corporation. Because ownership can be transferred without dissolving the corporation, the corporation enjoys an unlimited life. including professional practices (lawyers, doctors, architects, and certified public accountants). The two basic elements of a business are what it owns and what it owes. For example, google has total assets of approximately . 8 billion. Liabilities and stockholders" equity are the rights or claims against these resources. Thus, google has . 8 billion of claims against its . 8 billion of assets.