ACCT 1A Lecture Notes - Lecture 29: Authorised Capital, Retained Earnings, Issued Shares

• School: Irvine Valley College
• Department: Accounting
• Course: ACCT 1A
• Professor: urell

Document Summary

For most corporations, shareholder"s equity includes two primary sources: Generated by the profit-making activities of the company. This is the cumulative amount of net earnings since the corporation"s organization, less the cumulative amount of dividends paid by the corporation since organization. The corporation is the only business form that the law recognizes as a separate entity. As a distinct entity, the corporation enjoys a continuous existence, separate and apart from its owners. To create a corporation, an application for a charter must be submitted to the appropriate government authorities (federal or provincial) The application must specify the name of the corporation, the purpose (type of business), the types and number of shares authorized, and a minimum amount of capital that the owners must invest at the date of organization incorporation. Upon approval, the government issues a charter, sometimes called the articles of. Each corporation is governed by a board of directors elected by the shareholders.