ACCT 1209 Lecture Notes - Lecture 28: Weighted Arithmetic Mean
5 Apr 2016
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Acct 1209 - lecture 28 - corporate structure; benefits of stock ownership; earnings per share. The corporation is the only business form the law recognizes as a separate entity. As a distinct entity, the corporation enjoys a continuous existence separate and apart from its owners. It may own assets, incur liabilities, expand and contract in size, sue others, be sued, and enter into contracts independently of its stockholder owners. To protect everyone"s rights, the creation and governance of corporations are tightly regulated by law. Corporations are created by application to a state government (not the federal government). On approval of the application, the state issues a charter, sometimes called the articles of incorporation. Corporations are governed by a board of directors elected by the stockholders. When you invest in a corporation, you are known as a stockholder or shareholder. As a stockholder, you receive shares of stock that you subsequently can sell on established stock exchanges.
