FINE 2000 Chapter Notes - Chapter 1: Capital Structure, Limited Liability Company, Sole Proprietorship
Document Summary
Corporation: permanent, legal entity owned by shareholders/stockholders who are not personally liable for the business" liabilities. Confers limited liability (principle that the owners of the corporation are not personally responsible for its obligations. Prepare articles of incorporation and can incorporate under canadian business corporation act (federal) or provincial laws. Private company: corporation whose shares are privately owned (by small groups of managers and investors: not required to provide much financial information. All have board of directors, a group selected by shareholders, given responsibility of overseeing activities including appointment of top managers; in private company, shareholders are on the board. Legal separation of ownership and management, which gives the corporation permanence, is a distinctive feature ex. If manager is fired and replaced, corporation still survives. Some public companies have shareholder who owns more than 50% of shares who is most likely involved in operations.