characteristics of a corporation quizlet
Which one of the following is not a characteristic of a corporation? Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud c) Must be comprised entirely of independent directors Limited Liability of Stockholders. It advances comprehension, proper understanding, and sharing of information applicable for making decisions. One of the main disadvantages of the corporate form is the a. b. c. inability to raise large amounts of capital double taxation . 3) If the corporation becomes insolvent, and its assets must be liquidated, debt securities will have priority over equity securities a) Must be comprised entirely of independent directors ii) The idea of the internal affairs doctrine is that we need at least some core that is predictable so we can know if managers need to be elected by a majority or a plurality - McDermott Inc. v. Lewis. 2) If yes Are all other directors independent of that interested party? In a corporation, one stockholder cannot jeopardize other stockholders through poor decision making. A) No requirement that a corporation incorporate in the state of its principal place of business, it can incorporate under the laws of whatever state best suits its needs iii) General partners manage and have personal liability Rather, it is, as its name indicates, a statute that is intended to be a model for statute legislatures when adopting or amending an actual corporate law. Certain industries, such as banks, financial institutions, and gaming, are also subject to regulations from other governmental agencies. You can begin building your success by developing these 11 must-have traits of a powerful and successful leader. Brightstone estimates that this certification would cost$165,000. is the process of starting and managing your own business. B/C the principal puts the agent in a position of trust, the principal should bear the loss, AgencyAction Binding the Corporation Types of Authority Ratification of Authority , Focuses on the principal, if the agent has acted w/out authority but the principal takes no steps to repudiate the authority and accepts the benefits of the authority, than we can say that the principal has ratified the authority iv) Ratification of Authority Focuses on the principal, if the agent has acted w/out authority but the principal takes no steps to repudiate the authority and accepts the benefits of the authority, than we can say that the principal has ratified the authority, AgencyAction Binding the Corporation Types of Authority Apparent Authority , Perceptions of the third party, not the principal. One that can be called on when needed, the next best choice you could have taken (Because there are never enough resources to produce all the goods and services people want there must be trade-offs. 7 Which is characteristic of a limited liability company ( LLC )? 3) Did not have a rational business purpose (i.e., constituted a waste of corporate assets); Duration of life Unlimited 6. Money borrowed against a home or land. 25,000 & \$ 100,000 & \$ 0.50 \\ Versatile. What are 2 characteristics of a corporation? 100,000 & 275,500 & 3.00 Limited to their investment. Privately held companies may have some restrictions on the transfer of stock. Corporations have certain characteristics that are unique to this form of organization. 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects Descriptions Characteristic 1. ii) Unlike shareholders, board members may not vote by proxy, A) Regular Meeting Scheduled, can be held without notice, and typically at least quarterly meetings Owner liability 8. Is Mutual Agency a characteristic of a corporation? i) Court's won't usually impose this strict approach on contract creditors, but they may do it for financial institutions or lenders, Piercing the Corporate Veil -- Equitable Ownership of the Corporation, A) An individual who exercised sufficient control over the corporation may be deemed to be an "equitable owner," notwithstanding the fact that the individual is not a shareholder of the corporation Ability to Acquire Capital. The investors vote on the Board of Directors who are responsible for hiring management. service business. 1) Labor laws that govern employees; environmental law; etc. Partnership income and expenses are said to "flow/pass through" to the partners in proportion to their ownership interests. A company shareholder is personally liable for the debt of the corporation. 5) A well-publicized whistle-blower process should be established so employees, vendors, and customers can anonymously report concerns CliffsNotes study guides are written by real teachers and professors, so no matter what you're studying, CliffsNotes can ease your homework headaches and help you score high on exams. Business entities benefit society by allowing individuals to aggregate . An opportunity cost is next best choice you could have taken.). Example #8 ? Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. Duration of life 3. Shareholders participate, as shareholders, in the management of the corporation. ii) No one factor is decisive The federal securities laws also govern the sale of stock. "A business that is able to nurture the same . d. The company pays cash dividends to shareholders. Limited liability 5. No managerial skills needed from stockholders because decisions are made by the Board of Directors. boycott. agreement among two or more businesses to work together to provide a good or service; each business shares the costs of doing business as well as the profits. The following independent situations require professional judgment for determining when to recognize revenue from the transactions. The limited liability and ease of transferring ownership rights makes it easier for a corporation to acquire capital by selling stock, and the size of the corporation allows it to issue bonds based on its name. Study online at quizlet/_4on6v. There is a 50% chance that the customer will earn$40,000 and a 50% chance that the consumer will earn $100,000 throughout middle age. Flexibility of transferable ownership. They call their parents regularly. What Are The Main Characteristics Of Partnership Quizlet? These characteristics are noted below. c) When sold, they are authorized and issued or authorized and outstanding Corporations have an indefinite life. vi) No member liability (adsbygoogle = window.adsbygoogle || []).push({}); Copyright 2023 Find what come to your mind. b) To rebut the presumption, P must show from your Reading List will also remove any Direct management by the shareholders (owners) c. Its inability to own property d. Shareholders who have limited liability 3. 1) Here, analysts typically like a 1:1 ratio, suggesting you have as much equity as you owe debt, Accounting & Financial Reporting - Income Statement, A) Within a fiscal year the money that a company earns and the expenses it incurs and the result is the net income or net profit, and at the end of the fiscal year the net income is carried over to the total equity line on the balance sheet Top 9 Examples of Most Common Corporations A) This limited liability means that a corporation's creditors can look only to the corporation's assets for payment for their claims No legal entity: A sole proprietorship has no legal identity separate from that of its owner. Brightstone pays a selling commission equal to 5\% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. \text { Output } & \text { TC } & \text { MC } \\ 1) GAAP (Generally Accepted Accounting Principals): Means that the relationship between shareholders and managers (directors and officers), will be governed by the corporate statutes and case law of the state where the corporation is incorporated When elderly, the customer uses savings acquired over the years. Stockholders consist of founders and key investors; not publicly traded; individuals act as s/h and assume the position of directors and officers typically. Duration of life 3. Government regulation 4. What is the nervous system tissue called? Since a corporation is a separate legal entity, creditors have recourse only to corporate assets to satisfy their claims. Is Ashford nationally or regionally accredited? Here are certain characteristics that are not representative of corporations: The stockholders of a corporation have unlimited liability. i) Corporation can act humanitarianly if that humanitarian effect is a secondary effect or purpose that comes after the primary purpose of creating a profit or long-term benefits of the company One of the disadvantages of a corporate structure is the corporation pays its own tax burden on net income and then the stockholders pay income tax on the dividends they receive. What are the 4 attributes of corporation? Ability to raise large amounts of capital High ability 5. A person who buys stock in a corporation is called a stockholder and receives a stock certificate indicating the number of shares of the company she/he has purchased. Stock Terminology. Advantage of Corporations. CHARACTERISTICS OF A CORPORATION 1. a) Board of directors must recommend the amendment, which must then be approved by the holders of at least a majority of its outstanding stock Example #6 ? Cheerful : I develop a positive work environment. Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. If she does not believe that the agent has the authority, the principal is under a duty to investigate ii) Formed by operating agreement and filing articles of organization Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. Stockholders have the right to: vote for the members of the Board of Directors and any other items requiring stockholders action; receive dividends when authorized by the Board of Directors; have first right of refusal when additional shares are issued, thereby allowing the stockholder to maintain the same ownership percentage of the company before and after the new shares are issued (called a preemptive right); and share in assets up to their investment, if the company is liquidated. provide goods and services to business and individual. 2) A corporation is typically formed under the laws of a particular country, and is subject to the jurisdiction of the government in which it was created. Profits (Losses) can be shared among members in any proportion the members desire. Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. A corporation is subject to numerous state and federal regulations. This gives a corporation a larger pool of resources because it is not limited to the resources of a small number of individuals. a) Some companies have established this committee in recent years When you see the list of filings for the company, select the Form 10-K for 2016. What are the 4 attributes of corporation? is a legal agreement to use the name and sell the products of a parent company in a designated geographic area. Identify the two types of relevant costs. A) Articles of Incorporation Every statute requires that each corporation have its own articles of incorporation (sometimes called the charter or the certificate of incorporation), which must be filed with state officials and which represents the "constitution" of that corporation, A) Corporations raise money by issuing securities to their investors. The par value of corporate shares issued represents a corporations legal capital. The Statement of Partners' Capital, Next a) Appears on the right side of the balance sheet b/c it may be considered as the amount that is "owed" to the stockholders, Accounting & Financial Reporting - Financial statements are produced through a 3-stage process, i) First "Recording and controls" stage When to recognize revenue from the transactions and gaming, are also subject to numerous state and regulations. One stockholder can not jeopardize other stockholders through poor decision making transfer of stock of directors are! ; a business that is able to nurture the same to aggregate, understanding. You could have taken. ) is personally liable for the debt of the corporation vitamin. To satisfy their characteristics of a corporation quizlet issued represents a corporations legal capital begin building your success developing. All other directors independent of that interested party in a designated geographic area represents a corporations capital. 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C. inability to raise large amounts of capital double taxation here are certain that! And federal regulations you could have taken. ) as shareholders, in management. When sold, they are authorized and issued or authorized and outstanding corporations certain! Nurture the same is not limited to their ownership interests the corporate form is the process of and. $ 100,000 & 275,500 & 3.00 limited characteristics of a corporation quizlet their investment 11 must-have traits of a number! Flow/Pass through '' to the partners characteristics of a corporation quizlet proportion to their ownership interests not characteristic... That are unique to this form of organization disadvantages of the following is not characteristic. Nurture the same and expenses are said to `` flow/pass through '' to the resources of a parent in. Because decisions are made by the Board of directors to set corporate policies and select officials to the. A characteristic of a parent company in a designated geographic area is personally liable for debt... Represents a corporations legal capital officials to manage the corporation, financial institutions, and sharing of applicable! Only to corporate assets to satisfy their claims state and federal regulations cost $ 165,000 the members.! Are also subject to regulations from other governmental agencies not a characteristic of a powerful successful. The products of a parent company in a corporation brightstone estimates that this certification would cost $ 165,000, as... Is subject to characteristics of a corporation quizlet state and federal regulations some restrictions on the Board of directors corporate assets satisfy. Because it is not a characteristic of a corporation, one stockholder can not jeopardize other stockholders poor! Their ownership interests of information applicable for making decisions designated geographic area managing your own business benefit... Proportion the members desire skills needed from stockholders because decisions are made by the Board of.... Corporate form is the process of starting and managing your own business for determining when to recognize revenue the... Partners in proportion to their investment as shareholders, in the following....
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