Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
STOCKHOLDERS’ EQUITY Stockholders’ equity represents the amount that was contributed by the shareholders and the portion that was earned and retained. The corporate form of business organization begins with the submitting of articles of incorporation to the state in which incorporation is desired. A corporation charter is issued and the corporation is recognized as a legal entity subject to state law. Within a given class of stock, each share is exactly equal to every other share. In the absence of restrictive provisions, each share carries the right to participate proportionately profits, management, corporate assets upon liquidation, and any new issues of stock of the same class (preemptive right). A subsidiary ledger of stockholders is maintained by the corporation for the purpose of dividend payments, issuance of stock rights, and voting proxies. Many corporations employ independent registrars and transfer agents who specialize in providing services for recording and transferring stock. The basic ownership interest in a corporation is represented by common stock, which is guaranteed neither dividends nor assets upon dissolution. Common stockholders own a residual interest, but they generally control the management of the corporation and tend to profit most if the company is successful. The amount an individual pays for shares of
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/05/2012 for the course MATH 112 taught by Professor Taylor during the Spring '06 term at Texas A&M University, Corpus Christi.

Page1 / 2


This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online