ACCT 2100 Lecture Notes - Lecture 9: Legal Personality, Treasury Stock, Double Taxation
Document Summary
Require clear agreements about authority, risks, and the sharing of profits and losses. Corporations- a separate legal entity created by the authority of a state government. Each states has separate laws about establishing corporations. Few laws govern the operations of proprietorships and partnerships. Large, publicly traded corps are much more heavily regulated than smaller closely held corps. Board of directors (elected by shareholders) internal (managers) and external (non-managers) The ownership interest (equity) is a business is composed of: Sole proprietorship- single capital account for the owner (withdrawals) Capital stock consisting of common stock and preferred stock. Legal capital is the amount of capital, acquired by the state of incorporation, that must remain invested in the business. (the money that has to be left in the corporation) Usually not a very large number (especially low in ga) No-par stock- some states do not require a par value to be stated in the charter.
