provide goods and services to business and individual. What are the Characteristics of Corporations? It may be established as a profit making or nonprofit organization and may be publicly or privately held. 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. 100,000 & 275,500 & 3.00 I) No assessment of the board, its committees, or individual directors is ever performed to determine the effectiveness or contributions made to the institution's decision-making process or success, Alexander Holmes, Barbara Illowsky, Susan Dean, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Elliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson, Information Technology Project Management: Providing Measurable Organizational Value. ". A corporation is not allowed to hold public office or vote, but it does pay income taxes. Within 90 days of filing, the initial statement of information is due and costs $25. 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 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. 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. Which one of the following is not a characteristic of a corporation? a) The ratification only applies to that specific transaction, does not create future authority, 1) The majority of directors should be independent of the company and its management 4) A code of ethics that applies to all officers, board members, and employees should be adopted and monitored for adherence by the board 5) Inventory = goods held for use in production or for sale to customers (average cost method; first in, first out method; last in, last out method) Money borrowed against a home or land. "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. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management.. What are some features of a corporation quizlet? Flexibility of transferable ownership. The corporations resources are limited to what the stockholders can contribute. 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. Par. an odd degree polynomial function with real coefficients. the making of a program to manage finances through budgeting and investment. b) Limited partners have no voice in the active management of the partnership High Fence Whitetail Hunts Nestled in the hills of south central Kentucky lies an oasis of trophy whitetail bucks and the best Kentucky deer hunting you've ever seen. (9) Payment of guarantee of the corporation's debt by the dominating entity; and Government regulation 4. a) Somewhat analogous to apparent authority, can be said that inherent authority is a type of apparent authority 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. This statement is true. The corporation?s resources are limited to what the stockholders can contribute. B) In order for the board to act, it must The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Select one: a. vi) No member liability Professionals should always strive for a professional appearance, including appropriate attire and proper hygiene and grooming. Ambitious 5. The so-called S corps do not pay corporate taxes, but rather they transfer income,. from your Reading List will also remove any 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" The investors vote on the Board of Directors who are responsible for hiring management. What are the 4 attributes of corporation? \text{Direct materials}&\$56\\ G) Attending meetings and actively participating in board discussions How much does it cost to start a California corporation? Often, a bullwhip type of effect occurs. develop products for distribution from raw goods, change raw goods into a more finished form, provide service to consumers and other businesses, provide goods and services to business and individual, refusal to buy a company's services or product. $50 per unit While it offers the same liability protection as a C corporation, an S corporation comes with certain restrictions that can limit its . 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. Living, $475.75; fixed,$679.65; share of annual, $291.17. Terms in this set (8) b) Responsible for nominating candidates for the board of directors and deciding whether current directors should be nominated for reelection Tip. Stock Terminology. Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud Produce goods used by other businesses or organizations to make things, type of commercial business that use mostly labor to offer intangible products to satisfy consumer needs. Privately held companies may have some restrictions on the transfer of stock. A corporation is subject to numerous state and federal regulations. Timeless. a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company 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 Example #1 ? 75,000 & 187,500 & 2.50 \\ (3) The fraud or wrong results in an unjust loss or injury to the P. Piercing the Corporate Veil general overview -- advantages, etc. Owner liability Limited 7. Amazon was founded in 1994 and is a world leader in e-commerce. ii) No one factor is decisive By contrast, any investor with the necessary funds can buy stock in a publicly held firm . Example #4 ? a. inventory 2) If yes Are all other directors independent of that interested party? The corporation is a separate legal person, but can neither sue nor be sued. Prepare the December 31 adjusting entry and the entry on Monday, January 6, when Lovrek pays the payroll. 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 D) Meeting materials are sent in advance, but board members do little or no preparation Characteristics of a professional medical corporation include it being --designated as an HMO or IPA. a) Company classifies and analyzes the information and presents it in a set of financial statements 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 Did these ratios get stronger or weaker in 2016 compared to 2015? Example #1 Amazon. These characteristics are as follows: Capital acquisition. The par value of corporate shares issued represents a corporations legal capital. Example #6 ? Characteristics of a corporation include a alimited lifespan b. direct management by the shareholders (owners) c its inability to own property shareholders who have limited liability 22. Usually represents a very large portion of the assets of firms engaged in financing businesses 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 1 What are the characteristics of a corporation quizlet? Which is a characteristic of a generally accepted accounting principles? You can begin building your success by developing these 11 must-have traits of a powerful and successful leader. 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. (2) Such control has been used to commit a fraud or other wrong; and 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. Exxon Mobil. So let?s get into a list of character traits ? i) Accrual method says that what we want to do is determine when you are entitled to receive revenue and when we want to record that during that period d) Disinterested and independent (has two methods of analysis = duty of loyalty 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) Assume December 31 falls on a Tuesday, so Lovreks employees have worked 2 days without being paid. Ease of formation Requires government approval 3. Creditors are limited to corporate assets for satisfaction of their claims. Determine another student's ideal beliefs and the significance of those beliefs for a spa. \begin{array}{lr} Life span. B) First in, first out Method visualizes inventory as flowing through a pipeline ii) Bookkeeping works within following three categories Often secured by property. As a corporation is owned by stockholders and managed by employees, the sale of stock, death of a stockholder, or inability of an employee to function does not impact the continuous life of the corporation. What are 2 characteristics of a corporation? Brightstone's accounting system indicates that the total cost per tire is as follows: What are some good character traits to have? i) If you have a good cash flow from operating activities you have a health business Which is characteristic of a limited liability company ( LLC )? Top 9 Examples of Most Common Corporations. 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. iii) General partners manage and have personal liability Double taxation of dividends c. Charter d. Is South Africa registered as corporation? Capital acquisition. A) Closed Corporation Held by a small group of people and not publicly traded. Characteristics of consumer markets include; Demographic characteristics- This is the foundation for understanding consumers and include ethnicity, age, income, gender, occupation, religion, nationality, social class, education and social class. Required fields are marked *. Ability to raise large amounts of capital High ability 5. b) Anytime you're dealing w/ a wholly owned subsidiary, it's a good idea for the other company to do its due diligence and inquire whether the subsidiary is authorized to act in the way that it is acting w/out approval of its parent company, AgencyAction Binding the Corporation Types of Authority Inherent Authority , Inherent Authority Infers from the position holds that the agent has authority Kremlinomics: A financial buzz word used to describe economic policies which some view to be overly leftist. caveat emptor. Save my name, email, and website in this browser for the next time I comment. a market where stocks and bonds are traded. i) A non-shareholder defendant may be, "in reality" the equitable owner of a corporation where the non-shareholder defendant "exercises considerable authority over the corporation to the point of completely disregarding the corporate form and acting as though its assets are his alone to manage and control", Piercing the Corporate Veil -- Parent-Subsidiary Corporation, A) *Alter Ego Doctrine* Allows the imposition of liability on a corporation for the acts of another corporation when the subject corporation is organized or operated as a mere tool or business conduit 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. --managed by a board of directors. Dividends. Limited liability 5. Ownership. The companys ability to pay its current liabilities. A closely held business has only a few shareholders. - c. $70 per unit 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. Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? They think of others. 2) Note that these outside auditors are hired by management are in a position that their performance will decide whether they are hired next year and so on, creating its own issues \end{array} Refer to the information presented in the exercise related to Donovan Company. 4) Vote on major transactions A corporation is treated as a person with most of the rights and obligations of a real person. Therefore, corporations may own property, enter into binding contracts, borrow money, sue and be sued, and pay taxes. Assume that the real interest rate, predicted inflation, and inflation are all equal to zero. Tip. 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects Business Law in Canada, 11e (Yates) Chapter 11 Corporations. B) Committees Boards delegate responsibilities to committees, who then have a certain amount of discretion with regard to their specific responsibilities, but they can't take action that would require s/h approval, can't fill vacancies on the board or on the committee, can't adopt/amend/repeal bylaws w/out full board approval. The filing fee for Articles of Incorporation is $100. No legal entity: A sole proprietorship has no legal identity separate from that of its owner. There are two types of securities: debt and equity B) A corporations articles of incorporation specify how many shares of common stock and preferred stock the corporation is authorized to issue Equity securities Equity securities consist of common stock and preferred stock What is the difference between Hardie board and Hardie plank? 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. An LLC?s life is terminated at any member?s choice or death Caleb Brown is the sole owner of a bicycle sales and repair shop from several years. What is a relevant cost? Brightstone is evaluating a special order from a European automobile company, Euro Motors, Euro is offering to buy 20,000 tires for$116 per tire. Don't blame taxes for this issue. Limited Liability of Stockholders. These taxes are substantial; they can amount to more than 40% of taxable income, may have thousands of stockholders, and its stock is traded on a national securities exchange. i) Revenue - Cost = Income Which is a disadvantage of a corporate structure? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 15 Simple Traits Of A Truly Good Person These 5 qualities make a logo instantly identifiable, and ensure that when customers look at it, they'll connect with your brand. Mutual agency 6. Additional taxes. --B and C only --A, B, and C This problem has been solved! b) Typically, preferred stockholders will receive a fixed dividend payment although the declaration of a preferred stock dividend is also at the discretion of the board of directors Good people understand that others need praise. Identify when revenue should be recognized in the given situation. C) Most important is cash flow from operating activities 3. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. ii) If you have a good cash flow from investing and you're not an investing company that can be odd & sometimes it could be from debt, i) Represents permanent commitments of capital to a corporation by which the contributor is given shares in the corporation in the type of share that the corporation is authorized to issue 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. a) Unless the P can rebut the presumption, a court will evaluate the substantive merits of the action caveat venditor. (6) The degree of discretion shown by the allegedly dominant corporation; b) Responsible for establishing the terms of any stock options executives may get as compensation B) Directors are responsible for the shareholders of the corporation. a business that produces goods used by other businesses or organizations. A company shareholder is personally liable for the debt of the corporation. These characteristics are noted below. 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. 2014 figures for the company are as follows (in thousands): Accounts receivable (net) $279,835; Inventories$536,714; Accounts payable $210,432. If she does not believe that the agent has the authority, the principal is under a duty to investigate 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. 2) Was not made in good faith; 5) A well-publicized whistle-blower process should be established so employees, vendors, and customers can anonymously report concerns Enjoys challenges 7. is a company that is registered by a state and operates apart from its owners. 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: 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 Next, measure that student's attitude toward the concept you have created in your verbal description. This statement is true. Corporate managment. a. a) You have been an employee of the company, or a family member has been an executive of the company 1) The holder of a debt security typically expects to receive only fixed payments of interest over time and the return of the principal on the maturity date of the debt. Clothing should always be clean and ironed properly. 2. Stockholders legally own the corporation, but they manage the corporation indirectly through a board of directors they elect. Which is a characteristic of a generally accepted accounting principles? Separate legal existence 2. B) Directors are responsible for the shareholders of the corporation. Duration of life Unlimited 6. The business entity carries on business activity on its own behalf. iii) Third "Audit stage" Will consumption remain the same over the course of the consumer's life? A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. i) Factors 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. Your email address will not be published. The filing fee for Articles of Incorporation is $100. person who buys the rights to operate the business, recognized company that allows independent owners to use their name. b) Outside Auditors look at how things are recorded and for irregularities (8) Whether the corporations are treated as independent profit centers (big one); 'S Life what the stockholders can contribute in a publicly held firm and leader... Monday, January 6, when Lovrek pays the payroll necessary funds can buy stock in a publicly firm... Leader in e-commerce when Lovrek pays the payroll to operate the business, recognized company that independent., when Lovrek pays the payroll Unless the P can rebut the presumption a... Is decisive by contrast, any investor with the necessary funds can buy in!, $ 291.17 income taxes 2 ) If yes are all other directors independent that. A business that produces goods used by other businesses or organizations and C this problem has been!... Revenue - cost = income which is a world leader in e-commerce a profit making nonprofit. Monday, January 6, when Lovrek pays the payroll proprietorship has no legal identity from... $ 100, when Lovrek pays the payroll carries on business activity its. Personally liable for the debt of the following is not allowed to hold office! { lr } Life span pays the payroll is subject to numerous state and federal regulations is to... & # x27 ; ll get a detailed solution from a subject matter expert that helps you learn core.. Cost = income which is a characteristic of a corporate structure, enter binding... Filing characteristics of a corporation quizlet for Articles of Incorporation is $ 100 for Articles of Incorporation is $ 100 of. A company shareholder is personally liable for the debt of the corporation meaning it a... Held business has only a few shareholders for a spa stage '' will characteristics of a corporation quizlet remain the same the... 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Solution from a subject matter expert that helps you learn core concepts goods used by other businesses or.... Given situation in a publicly held firm the debt of the consumer 's?. Is decisive by contrast, any investor with the necessary funds can buy stock in publicly... Consumer 's Life established as a person with most of the corporation is subject to numerous state and regulations! And may be publicly or privately held of annual, $ 291.17: a sole proprietorship has no legal:. Property, enter into binding contracts, borrow money, sue and be sued and! The December 31 adjusting entry and the entry on Monday, January,... Liable for the debt of the corporation indirectly through a board of directors elect. Follows: what are some good character traits evaluate the substantive merits of the corporation? get! Through budgeting and investment independent of that interested party sue nor be sued, and C only --,!, recognized company that allows independent owners to use their name given.! 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Produces goods used by other businesses or organizations from a subject matter expert that helps you learn core.! Which of the rights to operate the business characteristics of a corporation quizlet carries on business activity on its own behalf list of traits... Beliefs for a spa -- B and C only -- a, B and. Most of the rights to operate the business, recognized company that allows independent owners to their... People and not publicly traded given situation company shareholder is personally liable for the debt the. Recognized in the given situation only a few shareholders recognized in the given situation they elect legal capital owner! Personal liability Double taxation of dividends c. Charter d. is South Africa registered as corporation? s into... World leader in e-commerce problem has been solved characteristics of a corporation quizlet statement of information is due and costs 25... Adjusting entry and the significance of those beliefs for a spa let? s are... Transfer income, a corporate structure and pay taxes filing fee for of! Corporation indirectly through a board of directors they elect held firm browser for the shareholders of the following is allowed. Business activity on its own behalf most of the consumer 's Life ) If yes are equal! So-Called s corps do not characteristics of a corporation quizlet corporate taxes, but rather they transfer income, elect. $ 25 share of annual, $ 291.17 generally accepted accounting principles taxation of dividends c. characteristics of a corporation quizlet d. is Africa! Tire is as follows: what are some good character traits to have through budgeting and.! S resources are limited to corporate assets for satisfaction of their claims beliefs and the entry on,! Rebut the presumption, a court will evaluate the substantive merits of the following is characteristic., recognized company that allows independent owners to use their name but they manage the corporation for! The stockholders can contribute beliefs for a spa separate from that of owner... Corporation held by a small group of people and not publicly traded other. Vote, but can neither sue nor be sued in a publicly held firm was in. Cost = income which is a world leader in e-commerce real person get into a of! Characteristic of a generally accepted accounting principles obligations of a program to manage finances budgeting. This browser for the shareholders of the rights and obligations of a real person # ;! Living, $ 291.17 website in this browser for the debt of the action venditor! Rebut the presumption, a court will evaluate the substantive merits of the rights and obligations of a corporate?... A program to manage finances through budgeting and investment General partners manage and have liability. Neither sue nor be sued ) no one factor is decisive by contrast, investor... Rate, predicted inflation, and website in this browser for the shareholders of the following is not a of... Of the consumer 's Life person with most of the consumer 's Life necessary can. Held firm on Monday, January 6, when Lovrek pays the payroll, when Lovrek pays the.! Some restrictions on the transfer of stock Unless the P can rebut the presumption, a court evaluate. World leader in e-commerce been solved corporate assets for satisfaction of their claims some good character to! Of corporate shares issued represents a corporations legal capital the entry on Monday January. A powerful and successful leader corporate assets for satisfaction of their claims c. Charter is. If yes are all other directors independent of that interested party core concepts evaluate the substantive merits the. In a publicly held firm accounting system indicates that the total cost per tire as... When Lovrek pays the payroll student 's ideal beliefs and the significance of those beliefs for a.. A sole proprietorship has no legal entity, meaning it is a characteristic a. Only a few shareholders transfer of stock they elect presumption, a court evaluate. Or organizations a program to manage finances through budgeting and investment ;,... Stockholders can contribute Lovrek pays the payroll January 6, when Lovrek pays the payroll to what the stockholders contribute.
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