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Corporations_Characteristics

Corporations_Characteristics - shareholders Board of...

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Corporations - Characteristics Legal entity - same rights as a person except voting and holding office o Right to sue and be sued o Right to own property o Right to enter into contracts Same responsibilities as a person o Pay taxes o Follow federal and state laws Categorized as o Profit or not for profit o Publicly held or privately held Advantages o Separate from owners so acts of owners don’t bind the corporation o Limited liability for shareholders (exceptions are fiduciary taxes) o Transferability of ownership o Ability to acquire capital o Continuous life o Managed by a Board of Directors elected by the
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Unformatted text preview: shareholders; Board of Directors appoints: President - CEO Controller - Chief accounting officer Treasurer - custody of funds and cash position (Notice segregation of duties) • Disadvantages o Separation of owners from management o Government regulation o Double taxation • Shareholder rights o Vote o Receive dividends (but not guaranteed) o Preemptive - right to retain same % of ownership by buying more shares o Residual claim - share in net assets @ liquidation...
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