ARBUS102 Chapter Notes - Chapter 11: Treasury Stock, Retained Earnings, Issued Shares
16 Feb 2017
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Shares can be purchased in small amounts. Shareholders are not liable for the corporation"s debts. Commonly, more corporations have one type shares called common shares. Owners of common shares usually enjoy a number of benefits including: Voting rights for each share you own, you allowed a set number of votes on major issues. Dividends shareholders receive a share of the corporation"s profits when these are distributed as dividends. Residual claim if the company ceases operation, shareholders share in any assets remaining after creditors have been paid. Pre-emptive rights to retain their ownership percentages, existing shareholders may be given the first change to buy newly issued shares before they are offered to others. Equity financing: obtaining long term financing by issues new shares to investors. All transactions between a company and its shareholders affect the company"s balance sheet account only and do not affect the income statement.
