The par value of corporate shares issued represents a corporations legal capital. Stockholders consist of founders and key investors; not publicly traded; individuals act as s/h and assume the position of directors and officers typically. 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) The duty to provide the faith and confidence and the duty of care, loyalty and obedience When you see the list of filings for the company, select the Form 10-K for 2016. vi) Majority decision making, i) Partnership w/ general & limited partners As a leader, you may exhibit the following traits: If you have strong leadership skills, one of your biggest advantages to a company is that they can eventually promote you. ii) Board = Agent/Principal Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. A) The corporation is a separate legal person, but can neither sue nor be sued. 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 At its most basic level, what is corporations about? Characte Professional management. Type of Tax Description Advantages Disadvantages Direct Taxes Personal income tax (time and money).Tax levied on incomes/wages/earnings Progressive - use a marginal tax rate that increases as the amount of taxable income increases, thus effective in income distribution. i) The relationship among what are described as directors, (the officers whom have the day-to-day operations), the shareholders and employeeswhat their rights are with one another Influential leaders have a wide collection of skills, including self-confidence, reliability and honesty. 2) Balance sheet value (or book value) = Cost less allowance for depreciation, Accounting & Financial Reporting - Intangible Assets , Such as patents or trademarkshave no physical existence, but often have substantial value A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. The companys inventory turnover and days inventory outstanding (DIO); accounts receivable turnover and days sales outstanding (DSO), accounts payable turnover and days payable outstanding (DPO), and the number of days in its cash conversion cycle. Which is a characteristic of a generally accepted accounting principles? Owner authority and control One vote per share 2. Business entities are legal organizations that exist by virtue of state law. The filing fee for Articles of Incorporation is $100. 1) Land, equipment, machinery, office equipment C) Most important is cash flow from operating activities The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Stock of a privately held company is not traded on an exchange and there are usually only a small number of stockholders. v) Manager-managed: managers act for LLC; members vote on major matters vi) No member liability 6) Amend the Bylaws, Warrant gives the creditor the option to buy the stock by a particular time, for a particular price, and when this is exercise the corporation has to issue additional stock to cover the obligation, i) A bond is a loan to the company for a fixed period of time 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. 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. Limited to their investment. Some refer to it as a legal person.. I) Ensuring and maintaining the board's independence, Red Flags of Deficiency in Governance to Watch For, A) A strong or dominant CEO "runs the show," soliciting little or no input from others and not tolerating the opposing view Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud The business entity carries on business activity on its own behalf. (3) Intermingling of funds; ability of profit-making organizations to compete with businesses in other countries effectiveness making the right decisions about what products or services to offer customers and how to produce and deliver them efficiency producing needed goods or services quickly and at a low cost domestic goods products made by firms in the United States Capital acquisition. It can be easier for a corporation to acquire debt and equity, since it is not constrained by the financial resources of a few owners. It can be easier for a corporation to acquire debt and equity, since it is not constrained by the financial resources of a few owners. iii) Third "Audit stage" D) Also, corporations are not natural personas, A) A business corporation is organized and carried on primarily for the profits of the shareholders A corporation can obtain capital by selling stock or bonds. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. Additional taxes. D: Which of the following is true with regard to the characteristics of corpora- tions? As an entity separate and distinct from its owners, the corporation acts under its own name rather than in the name of its stockholders. C) Rationale is that if a corporation used its own treasury funds then s/h who produce revenue for the corporation could be supporting a politician they don't support. b. joint venture. (d) You borrow money in August from RBC Financial Group. ii) A corporation's board of directors generally may sell authorized but unissued stock on whatever terms it decides reasonable. 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 B) Working with management to promote ethical, positive corporate culture Separate Legal Existence. iii) Perpetual life maintaining employment process training and development staff, Latin for "let the seller beware"; sellers need to take responsibility for the products they sell, process by which people attempt to preserve, protect, and manage resources, one who selects, purchases, uses, or disposes of services or goods, a movement to pass laws that protect the consumer from unsafe and unfair business practices, basic rights of consumers to safety, to be heard, to choose, to be informed, to have problems corrected, to consumer education, and to service, business practices that are deliberately misleading, the legal responsibility a manufacturer has to make a safe product, collecting items for processing so that they might be used again, when someone advertises a product at a low price to lure consumers into the store, then tries to get them to switch to a more expensive item, a card allowing someone to make a purchase on borrowed money. Tax status of income Previous question Next question Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? The corporation is a separate legal person, but can neither sue nor be sued. b) Outside Auditors 1) Cash = money in the till and money in demand deposits in the bank Don't blame taxes for this issue. 1) Labor laws that govern employees; environmental law; etc. If you already know that you need a logo for your business, you can use our logo maker to help you create a strong one. is a business owned by two or more people who share its risks and rewards. The communication of thoughts, information, perceptions, and opinions among individuals is a continuous cycle in professional, personal, and business settings. Often secured by property. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. These characteristics are noted below. What is the nervous system tissue called? Advantage of Corporations. What is the standard deduction for over 65 in 2020? 15 Simple Traits Of A Truly Good Person 1) What are the voting rights that s/s are able to exercise? When someone is generous, kind, energetic, or optimistic they exude energy that attracts others. 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 Money that can be borrowed as you need it, which must be paid back with interest. 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 This statement is true. 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors Government regulation 4. Corporations must pay federal and state income taxes as a separate legal entity. What are the 4 attributes of corporation? 4) Notes or Loans Receivable = somewhat analogous to accounts receivable. A shareholder's liability is limited to the amount he or she paid for the shares. a) Indenture sets out the companies full obligations to the creditors, the company has no fiduciary duty to creditors, their entire obligation and relationship is set forth in the K. In order to pierce the corporate veil, a P must prove (1) The owner has exercised such control that the corporation has become a mere instrumentality of the owner, which is the real actor; (domination) 2. Identify the two types of relevant costs. iv) Board of directors manage Legal status Separate legal entity 8. Ownership is easily transferred through sale of stock 4. A person with ?good character? 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. They compliment others when deserved. Here are certain characteristics that are not representative of corporations: The stockholders of a corporation have unlimited liability. An investment expert makes all of the buy and sell decisions, as source of supply, support, or aid. a) At-will dissolved by any partner withdrawal is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. a) Some companies have established this committee in recent years Members can assign their economic rights in the LLC. Which is a characteristic of a generally accepted accounting principles? Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. Stock Terminology. What are 3 characteristics of corporations? 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. Double taxation. Save my name, email, and website in this browser for the next time I comment. 3) Ability to have influence as to who is put on the ballet as a nominee Example #5 ? \text{Direct labor}&22\\ a) Partnership is not a taxpaying entity. 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. a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company i) Like the alter ego doctrine, the single business enterprise doctrine is an equitable remedy, which applies when the corporate form is "used as part of an unfair device to achieve an inequitable result" traits, like being honest, respectful, responsible, caring, fair. 2023 Course Hero, Inc. All rights reserved. How long does it take for braces to close gaps. b) Responsible for establishing the terms of any stock options executives may get as compensation Find the total monthly expenses. Relevant. i) External affairs of a corporation are generally governed by the law of the place where the activities occur and by federal and state regulatory statutes rather than by the place of incorporation i) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock Privately held companies may have some restrictions on the transfer of stock. 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)? 1) Dilution Reduction in the economic return of your shares and the voting power and control you can exert by owning those shares, The most basic of all corporate securities i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. They think of others. A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. ii) No one factor is decisive 9) Management and the board of directors should have formal succession plans in place that are reviewed annually iv) Managers = Agent, AgencyAction Binding the Corporation Types of Authority, i) Actual Authority Principal specifies expressly what the agent is authorized to do, through words or conduct Solution from a subject matter expert that helps you learn core concepts is put on the ballet as separate... 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