STOCKHOLDERS - STOCKHOLDERS' EQUITY Stockholders' equity...

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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
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STOCKHOLDERS - STOCKHOLDERS' EQUITY Stockholders' equity...

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