CHAPTER 34 - CHAPTER SUMMARY NATURE OF CORPORATIONS...

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CHAPTER SUMMARY NATURE OF CORPORATIONS Corporate Attributes Legal Entity a corporation is an entity apart from its shareholders, with entirely distinct rights and liabilities Creature of the State a corporation may be formed only by substantial compliance with a State incorporation statute Limited Liability a shareholder’s liability is limited to the amount invested in the business enterprise Free Transferability of Corporate Shares unless otherwise specified in the charter Perpetual Existence unless the charter provides otherwise Centralized Management shareholders of a corporation elect the board of directors to manage its business affairs; the board appoints officers to run the day-to-day operations of the business As a Person a corporation is considered a person for some but not all purposes As a Citizen a corporation is considered a citizen for some but not all purposes Classification of Corporations Public or Private Mann CH 34- 1
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Public Corporation one created to administer a unit of local civil government or one created by the United States to conduct public business Private Corporation one founded by and composed of private persons for private purposes; has no governmental duties Profit or Nonprofit Profit Corporation one founded to operate a business for profit Nonprofit Corporation one whose profits must be used exclusively for charitable, educational, or scientific purposes Domestic or Foreign
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