LGS 200 Chapter Notes - Chapter 19: Implied Powers, Corporation, Foreign Corporation

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Section 1: the nature and classification of corporations. Corporation- a legal entity created and recognized by state law. Can have one or more owners and its operates under a name distinct from the names of its owners. Recognized as a person and enjoys many of the same rights and privileges under state and federal law that u. s. citizens enjoy. Responsibility of the overall management of the firm is entrusted to a board of directors. When an individual purchases a share of stock in a corporation, that person becomes a shareholder and an owner of the corporation. Shareholder can sue, corporation can sue the shareholder. Corporation shareholders are not personally liable for the obligations of the corporation beyond the extent of their investments. In certain situations, a court can pierce the corporate veil and impose liability on shareholders for the corporation"s obligations.

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