BMGT 220 Chapter Notes - Chapter 11: Double Taxation, Preferred Stock, Dividend
Document Summary
Corporation: a legal entity, distinct and separate from the individuals who create and operate it. It may incur liabilities, enter into contracts, and sell shares of ownership. Stock: shares of ownership that a corporation may sell. Stock gives corporations the ability to raise large amounts of capital. Stockholders/shareholders: own the stock of the corporation, buy and sell stock without affecting the corporation"s operations or continued existence. Public corporations: shares of stock are traded in public markets. Private/non-public corporations: shares are not traded publically and are usually owned by a small group of investors. Limited liability: stockholders of a corporation have this, the creditors usually may not go beyond the assets of a corporation to satisfy their claims. A financial loss that a stockholder may suffer is limited to the amount invested. Board of directors: meets periodically to establish corporate policies. Dividends: corporate income that is distributed to stockholders which has already been taxed.