Business Administration 2257 Chapter Notes - Chapter 11: Investment, Capital Account, Treasury Stock

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Eleni Petrou

Document Summary

Corporation = legal entity that is separate and distinct from owners known as shareholders. Public corporation may have thousands of shareholders and public traded/held. Private corporation has few shareholders and is not offered for sale to public. Corporation acts under its own name rather than the name of its shareholders. Acts of the corporation owners do not bind the corporation unless the owners are also agents of the corporation. Ex: if you owned tim horton shares, you would not have the right to purchase or lease a new building for company unless you were designated as an agent of the corporation. Shareholders are limited to their investment in terms of liability. Ownership in corporation is held in shares of capital = transferable units. Shareholders can dispose all of their interest in corporation by selling their shares. Fairly easy for corporation to obtain capital (cash) by issuing shares.