COMMERCE 1AA3 Lecture 1: COMMERCE 1AA3- Chapter 9
11 Jan 2019
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Corporation: separate legal entity, has most of the rights and privileges of a person, classified by purpose and ownership. Ownership: public or private -traded on the stock exchange or not. Characteristics of a corporation: separate legal existence, limited liability of shareholders, transferable ownership rights, ability to acquire capital, continuous life, corporation management, government regulations. Corporation management: ownership separated from management. Increased costs and complexity in order to adhere to government regulation. Shareholders rights: to raise capital, the corporation sells shares, ownership rights are specified in articles of incorporation or in by-laws. If there is only one class of shares, these are referred to as common shares. Share terminology: share capital and contributed capital, authorized shares. Maximum amount of shares a corporation is allowed to sell as authorized by corporate charter. Number of shares sold: outstanding shares. Number of shares sold less treasury shares.
