chapter 11 notes 2

Chapter 11 notes 2 - Reporting and Analyzing Equity I Corporate form of organization A Characteristics 1 An entity created by law 2 Existence is

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Reporting and Analyzing Equity I. Corporate form of organization A. Characteristics 1. An entity created by law 2. Existence is separate from owners a) Owners (shareholders) are liable only to the point of their investment 3. Has rights and privileges 4. Must be registered with the state B. Ownership 1. Privately held: ownership is restricted to specific individuals 2. Publicly held: ownership is available to the public C. Advantages 1. Separate legal entity 2. Limited liability of stockholders 3. Transferable ownership rights: sold/ bought on the stock exchange 4. Continuous life: not dependent on livelihood of developers or owners 5. Lack of mutual agency for stockholders: one holder can not enter a contract affecting the other holders 6. Ease of capital accumulation: easy way for corporation to get cash and investors to gain cash D. Disadvantages 1. Government regulation: follow procedures set by Security Executive Council 2. Corporate taxation: corporate income is taxed as income of the corporation and as
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This note was uploaded on 02/09/2012 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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Chapter 11 notes 2 - Reporting and Analyzing Equity I Corporate form of organization A Characteristics 1 An entity created by law 2 Existence is

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