BU227 Chapter Notes - Chapter 12: Initial Public Offering, Issued Shares, Authorised Capital
Document Summary
The corporation is the only business form that the law recognizes as a separate 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. The application must specify the name of the corporation, the purpose, the types and number o shares authorized and a minimum amount of capital that the owners must invest at the date of the organization. When you invest in a corporation, you are known as a shareholder or stockholder. As a shareholder, you receive shares that you can subsequently sell on established stock exchanges without affecting the corporation. Authorized number of shares the maximum number of shares that a corporation can issue, as specified in the charter. Issued shares the number of shares that have been issued. Outstanding shares the total number of shares that are owned by shareholders on any particular date.
