03 -- Corporations—Formation, Powers, and Financing

03 -- Corporations—Formation, Powers, and Financing

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CPA BEC - STUDY UNIT 3 Corporations: Formation, Powers, and Financing: Core Concepts A. Definition 1. A corporation is a legal entity created under a statute to carry out the purposes permitted by law and the articles of incorporation. The corporation is a legal person separate from its shareholders. Corporations are governed by shareholders who elect a board of directors and approve fundamental changes in the corporate structure. Directors establish corporate policies and elect or appoint corporate officers. These carry out the policies in the day-to- day management of the organization. B. Characteristics of a Corporation 1. A business is organized in corporate form to provide limited liability , separation of ownership from management , free transferability of interest , perpetual life , and ease of raising capital . C. Powers of a Corporation 1. Authority for corporate action derives from the state incorporation statute or the articles of incorporation. The Revised Model Business Corporation Act (RMBCA)
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03 -- Corporations—Formation, Powers, and Financing

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