ACG 2021 Lecture Notes - Lecture 20: Double Taxation, Retained Earnings, Legal Personality
8 Apr 2018
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Document Summary
Organizing a corporation: corporate organizers (incorporators) obtain a charter from the state, charter includes authorization to issue shares of stock. Incorporators: pay fees, sign the charter, file documents with the state, agree to set of bylaws. Stockholders" equity: paid-in capital, also, called contributed capital, amount of equity stockholders have contributed, includes stock accounts and any additional paid-in capital, retained earnings, increased by earnings through profitable operations, reduced by dividends declared. Par value: arbitrary amount assigned to share of stock, usually set low to avoid legal issues, most states do not allow companies to issue stock below par, no-par stock, may have a stated value. Review: stockholders have ultimate control of a corporation due to the power to elect the board of. Directors: common stockholders have 4 basic rights, unless withheld by agreement. (voting, dividends, liquidation, and preemption, preferred shareholders do not receive the right to vote, preferred shareholders receive a fixed dividend.
