acts, thinks, and feels in a way that matches some commonly accepted ?good? 9) Management and the board of directors should have formal succession plans in place that are reviewed annually They remember their manners. What are the 4 attributes of corporation? C. The title of the corporation is limited by the death of the owner Which of the following is a characteristic of a limited liability company (LLC)? 8 Which is a disadvantage of a corporate structure? 2 Which one of the following is not a characteristic of a corporation? 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. 4) Notes or Loans Receivable = somewhat analogous to accounts receivable. Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? a) Internal Auditor Thrifty (not wasteful!) Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for Under Armour under Company Filings. H) Conducting periodic evaluations of individual member and overall board performance Characteristics of corporations Legal entity Rights as person and citizen Creature of state Limited liability of shareholders Unrestricted transferability of corporate shares Perpetual existence Centralized management Corporate taxation Express powers: iii) Corporate managers who breach their fiduciary duties can be held personally liable for any losses they cause the corporation, i) In order to encourage directors to take risks on behalf of the corporation w/out fear of personal liability for any losses which may ensue, courts have developed this rule Versatile. " [Leadership] is all about influencing people," said Kirstin Lynde, founder of leadership development firm Catalyze Associates, in a Facebook Live interview. ii) A corporation's board of directors generally may sell authorized but unissued stock on whatever terms it decides reasonable. iii) Perpetual life c) Must be comprised entirely of independent directors Professional management. Relative ease of transferring ownership rights. Owner liability Limited 7. Organization costs, including legal fees, underwriters' fees for stock and bond issues, and incorporation fees, are recorded as an intangible asset and amortized over a period of time not to exceed 40 years. a) It is an action in equity brought by a shareholder on behalf of the corporation A corporation is subject to numerous state and federal regulations. A. How does the CPI differ from the MMPI? Once a public corporation sells its initial offering of stock, it is not part of any subsequent transfers except as a record keeper of share ownership. Limited liability 5. ii) Formed by filing articles of incorporation with the state all the positive, good character traits, at least: Strong (mentally!) Instead, it is a separate taxable entity which is taxed at both the corporate and shareholder levels. Example #7 ? B) Internal Affairs Doctrine 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 a) Current liabilities Debt the firm owes that must be paid within one year of the balance sheet date i) Factors Courteous : I care about workplace atmosphere. 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. The corporation is considered a separate legal entity, conducting business in its own name. Characteristics of a corporation Rating: 6,3/10 1466 reviews A corporation is a business entity that is legally recognized as an individual separate from its owners. Corporate managment. ii) *Compensation Committee* b. "One of the key characteristics of a successful business is a leader (or leadership team) who gets their employees as excited about their product or service as they are," he said. 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. is a legal agreement to use the name and sell the products of a parent company in a designated geographic area. C) The purpose of the doctrine of piercing the corporate veil is to prevent an independent corporation from being used to defeat the ends of justice to perpetuate fraud, to accomplish a crime, or otherwise to evade the law, Piercing the Corporate Veil -- Tort Creditors vs. Contract Creditors, A) Courts make the distinction between contract creditors and tort creditors They are generous with their belongings. 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 The corporation?s resources are limited to what the stockholders can contribute. Two key characteristics of a C-Corporation are: it provides limited liability to the owners/shareholders; and, unlike an S-Corp, it is not a flow-through entity. What theory is involved in the modern corporation? $$ B) In order for the board to act, it must The par value of corporate shares issued represents a corporation?s legal capital. Characteristic Corporations 1. What will she spend in each stage of her life? In a corporation, one stockholder cannot jeopardize other stockholders through poor decision making. 1) Generally, this means a member must be able to read and understand fundamental financial statements Nearly every large US company has an intelligence office of some kind. Is Mutual Agency a characteristic of a corporation? Capital acquisition. a market where stocks and bonds are traded. Previous i) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock What is a relevant cost? Who is the most powerful person in a corporation? ii) Underlying rationale is that you want to match up the cost and revenue so you can match up how profitable or well the company is doing, Accounting & Financial Reporting - Statement of Cash Flow, A) Something to reconcile the fact that on the one hand you're using the accrual method to reconcile costs and on the other hand you need to know where you are in terms of cash flow Your email address will not be published. a) General partners have comparable liability to the liability they have in a general partnership, but a limited partners liability is limited to the capital she has contributed to the partnership iii) Officers = Agent/Principal A) This limited liability means that a corporation's creditors can look only to the corporation's assets for payment for their claims a. 7) Deferred Charges = type of asset similar to prepaid expenses, in that they reflect payments made in the current period for goods or services that will generate income in subsequent periods, Accounting & Financial Reporting - Assets - Inventory methods, Inventory = goods held for use in production or for sale to customers These taxes are substantial; they can amount to more than 40% of taxable income publicly held corporation Public companies are governed under rules of the Securities and Exchange Commission ( " the SEC " ). c) If you or a family member are affiliation in any way with some outside auditor of the company, i) *Audit Committee* b) If one of two innocent parties must suffer due to betrayal of trusteither the principal or the third partythe loss should fall on the party who is most at fault. 1) Analysts typically like a 2:1 ratio, this suggests you have enough cushion to pay your bills as they become due Corporations must pay federal and state income taxes as a separate legal entity. Microsoft. Corporations are created under state or federal laws and have many of the same legal rights as a person . a) Somewhat analogous to apparent authority, can be said that inherent authority is a type of apparent authority 4) Vote on major transactions Limited liability for owners. Required fields are marked *. Business Law in Canada, 11e (Yates) Chapter 11 Corporations. Stockholders consist of founders and key investors; not publicly traded; individuals act as s/h and assume the position of directors and officers typically. Consistency. Owner authority and control One vote per share 2. Characteristics of Entrepreneurs 1.Risk taker 2. A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. A) The duty to provide the faith and confidence and the duty of care, loyalty and obedience What are the Characteristics of Corporations? c) Informed and rational basis = duty of care - a. Legal status 5. b) Survey the extent to which there are processes set up for the board to act effectively and for the directors to be held accountable Study online at quizlet/_4on6v. ". 1? What are the Characteristics of Corporations? Example #5 ? b) Outside Auditors ii) When looking to who can speak on behalf of the corporation you look to the chain of command, California ApproachPseudo Foreign Affairs (to internal affairs), i) California holds the view that if the most important interest in the company are operated in Californiaif 50 percent of the company is run in the statethen California state law will apply, i) Association of two or more people 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. Ownership is easily transferred through sale of stock 4. A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. Limited Liability of Stockholders. The most significant of these are: Separate Legal Existence Continuous Life Ability to Acquire Capital Transferability Limited Liability Government Regulations Taxation Governance and Management Let's look at each of these in turn. Amazon. Less is more, fewer is better, and simple rules are the common mantra here. 1) GAAP requires firms to carry intangible assets they have purchased at cost less an allowance for amortization (the equivalent of depreciation, applied to intangibles), Accounting & Financial Reporting - Liabilities, Liabilities account for the accounts that firms owe to others, whether pursuant to written evidence of indebtness or otherwise A corporation is owned by stockholders C. All shares of a corporation must be held by a single individual D. Each stockholder has the authority to commit the corporation to a binding contract through his actions. b) Be composed solely of independent directors 5) Vote to amend to Articles Certain industries, such as banks, financial institutions, and gaming, are also subject to regulations from other governmental agencies. Enforcing a claim for breach of fiduciary duty i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers 1) Dividends (9) Payment of guarantee of the corporation's debt by the dominating entity; and The so-called S corps do not pay corporate taxes, but rather they transfer income,. a business that uses mostly labor to offer intangible products. What is the standard deduction for over 65 in 2020? 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects a) Partnership is not a taxpaying entity. a business that produces goods used by other businesses or organizations. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received Publicly held companies with stock traded on exchanges are required to file their financial statements and additional informative disclosures with the Securities and Exchange Commission. Enter a Melbet promo code and get a generous bonus, An Insight into Coupons and a Secret Bonus, Organic Hacks to Tweak Audio Recording for Videos Production, Bring Back Life to Your Graphic Images- Used Best Graphic Design Software, New Google Update and Future of Interstitial Ads. is a business owned by two or more people who share its risks and rewards. It must be paid back with interest, A person sets his/her money aside for future income to meet long term goals, individuals purchase part of the corporation. Professional appearance. - b.$55 per unit Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. What are the 4 attributes of corporation? The filing fee for Articles of Incorporation is $100. 50,000 & 150,000 & 1.00 \\ ii) Bond is a K that is governed by the terms and the K and the terms are set forth in what is called an Indenture What are the advantages and disadvantages of the three types of business? The investors vote on the Board of Directors who are responsible for hiring management. Top 9 Examples of Most Common Corporations Ambitious 5. Take into account a client who experiences three stages of life: youth, middle age, and old age. A company with fewer than 100 employees is generally considered a small-sized business, while one with between 100 and 1,500 employees is a medium-sized business. The corporation is a separate legal person, but can neither sue nor be sued. 1) The corporation (the real party at interest) is a nominal defendant and the plaintiff-shareholder (in reality, her attorney), controls prosecution of the suit \text{Factory overhead (60\\\% variable)}&25\\ B) Directors are responsible for the shareholders of the corporation. Cooperative : I get along well in a team setting. Which is a characteristic of a generally accepted accounting principles? Capital acquisition. B) Represents the difference/surplus between revenues and cost B) Board members don't hold the CEO or management team accountable for actions or inactions 4) A code of ethics that applies to all officers, board members, and employees should be adopted and monitored for adherence by the board $$ B) Instead, they need to set up Political Action Committees (PAC) & raise revenues separately and can support that way Dividends. Ability to raise large capital amounts 2. They compliment others when deserved. (d) You borrow money in August from RBC Financial Group. b) Responsible for establishing the terms of any stock options executives may get as compensation The board, in turn, formulates operating policies and also selects officers to execute policy and to perform daily management functions. The name and sell the products of a corporation can sell shares to investors! Chapter 11 Corporations transferred through sale of stock 4 and larger entities can issue bonds to obtain significant! 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