RSM424H1 Chapter Notes - Chapter 12: Share Capital, Legal Personality, Retained Earnings
Document Summary
Chapter 12 organization, capital structures, and income distributions of corporations. The process of creating a corporation requires that, at a minimum, share capital be issued to the shareholder in return for some consideration. This means that a corporation can be created by issuing some shares to an owner in exchange for a nominal asset, such as a cash contribution of. Fro(cid:373) the shareholder"s perspe(cid:272)ti(cid:448)e, (cid:271)oth de(cid:271)t (cid:894)loa(cid:374)s re(cid:272)ei(cid:448)a(cid:271)le fro(cid:373) the (cid:272)orporatio(cid:374)(cid:895) a(cid:374)d equity (shares owned in the corporation) constitute capital property for tax purposes and yield a return on investment in the form of interest or dividends. The value of shares may change as a result of the following factors: Profits earned or losses incurred by the corporation. Increases or decreases in the value of assets owned by the corporation, such as land, buildings, equipment, goodwill, and other intangibles. The distribution of profits by corporate dividends.