BA 211 Chapter Notes - Chapter 10: Franchise Tax, Legal Personality, Dividend

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A corporation is a business entity formed under state law and is a distinct entity an artificial person that exists apart from its owners, the stockholders, or shareholders. Has many rights that a person has: a corporation may buy, own, and sell property, assets and liabilities in the business belong to the corporation and not to its owners, may enter into contracts, sue, and be sued. Full names may include corporation or incorporated (abbreviated corp. and inc. ) Can also use the word company (abbreviated to co. ) Have continuous lives regardless of changes in their ownership. The stockholders of a corporation may buy more of the stock, sell the stock to another person, give it away, or bequeath it in a will. Transfer of stock from one person to another does not affect the continuity of the corporation. Stockholders have limited liability fo(cid:396) the (cid:272)o(cid:396)po(cid:396)atio(cid:374)"s de(cid:271)ts: no personal obligation for corporate liabilities.

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