Corporation management (can be separate from ownership). 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 B) Business Judgment Rule Refer to the information presented in the exercise related to Donovan Company. 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. Transcribed image text: All of the following are . iii) Officers = Agent/Principal ii) Where the corporate form is used as a shield behind which injustice is sought to be done by those who have control of it that equity penetrates the corporate veil, A) 141 says that the business and affairs of every corporation shall be managed by the board unless otherwise provided in the code, or in the certificate of incorporation Your email address will not be published. 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? Often secured by property. A corporation is a legal entity that is separate and distinct from its owners. Corporations have an indefinite life. Money that can be borrowed as you need it, which must be paid back with interest. iv) *Governance Committee* Removing #book# See Answer B) Working with management to promote ethical, positive corporate culture 1) Generally, this means a member must be able to read and understand fundamental financial statements In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. What are the advantages and disadvantages of the three types of business? 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects To be recognized as a corporation, a business must file an application that includes the corporation's articles of incorporation (charter) with the State, pay an incorporation fee, and be approved by the State. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. Particularly in a public company, the stock can be easily transferred in part or total at the discretion of the stockholder. Decision maker 3. service business. 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. 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. a) Unless the P can rebut the presumption, a court will evaluate the substantive merits of the action "A business that is able to nurture the same . Now a new generation of influencers has come on the scene. d) If they are repurchased by the corporation they become authorized and issued, but not outstanding, Before a corporation that has issued all the shares authorized by the articles of incorporation can issue more stock, it must amend the articles of incorporation to authorize additional shares 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. i) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock --owned by shareholders. Corporations have a number of distinguishing characteristics. B) Cash flow just makes certain type of adjustments as to which components of the statement reflect where cash is going in and going out What Are The Main Characteristics Of Partnership Quizlet? Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. A truly good person will compliment when deserved and offer constructive criticism when warranted. However, this special order would not have a sales commission. The duty to provide the faith and confidence and the duty of care, loyalty and obedience i) Directors, officers and controlling shareholders owe a fiduciary duty to the corporation; and through the corporation to the shareholders It is a team of people, including suppliers of money and labor, who work together to earn a return on their investment. Microsoft. There may be thousands, even millions, of stockholders in a public company. What will she spend in each stage of her life? Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for Under Armour under Company Filings. They call their parents regularly. a) At-will dissolved by any partner withdrawal 3 What are 3 characteristics of corporations? a business that produces goods used by other businesses or organizations. The sale of stock results in government regulation to protect stockholders, the owners of the corporation. 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 An opportunity cost is next best choice you could have taken.). Certain industries, such as banks, financial institutions, and gaming, are also subject to regulations from other governmental agencies. What are the Characteristics of Corporations? The filing fee for Articles of Incorporation is $100. 2) Preferred stock sits between common stock and debt 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 2) Marketable Securities = securities that can be readily sold and converted into cash and are not held for current operations If you continue to use this site we will assume that you are happy with it. Goal setter 6. iii) Perpetual life ". 2) To get information from management A corporation is a legal entity that can own property, enter into contracts, sue and be sued. 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. 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 The Statement of Partners' Capital, Next 2. Is Mutual Agency a characteristic of a corporation? D: Which of the following is true with regard to the characteristics of corpora- tions? Which of the following is true with regard to the characteristics of corporations? Amazon was founded in 1994 and is a world leader in e-commerce. Limited liability 5. c) Audit Board Committee. c) If you or a family member are affiliation in any way with some outside auditor of the company, i) *Audit Committee* 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 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 Fluctuating demand is another characteristic of B2B markets: a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it. B) Directors are responsible for the shareholders of the corporation. Required fields are marked *. 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. Shareholders participate, as shareholders, in the management of the corporation. F) Meetings are characterized by little or no discussion, or board members go out of their way to avoid conflict, resulting in rubber stamping 2) If yes Are all other directors independent of that interested party? Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. Similarly, a person or an entity wishing to purchase stock in a corporation does not require the approval of the corporation or its existing stockholders before purchasing the stock. Creditors are limited to corporate assets for satisfaction of their claims. bookmarked pages associated with this title. How to Market Your Business with Webinars? Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud a) Some companies have established this committee in recent years Wild, Ken W. Shaw, Financial Accounting: Information for Decisions, Just-in-time manufacturing philosophy reduces all of the following except Humans Resources. What are the characteristics of a corporation quizlet? a) The corporation pays taxes, not individuals Ownership of a corporation is held in shares of capital stock, which are transferable units. Ambitious 5. c) Keeping detailed minutes of the meeting, AgencyAction Binding the Corporation Parties to the legal agency relationship, i) Corporation = Principal The filing fee for Articles of Incorporation is $100. iii) Third "Audit stage" 7 Which is characteristic of a limited liability company ( LLC )? (3) Intermingling of funds; 1. G) Board members believe the institution exists for personal benefit and engage in self-serving transactions at the institutions expense Characte a market where stocks and bonds are traded. Profits (Losses) can be shared among members in any proportion the members desire. How much does it cost to start a California corporation? View the full answer. Who is the most powerful person in a corporation? D) Also, corporations are not natural personas, A) A business corporation is organized and carried on primarily for the profits of the shareholders a) Presentation of the corporations financial statements fairly and accurately reflects the financial position of the company What is an example of a business that would have a high inventory turnover? Stockholders legally own the corporation, but they manage the corporation indirectly through a board of directors they elect. Transferable ownership rights. Example #6 ? Can have current assets, fixed assets, and intangible assets A. So, the minimum grand total for forming a California corporation is $125. D) Meeting materials are sent in advance, but board members do little or no preparation Terms in this set (8) Advantage of Corporations. b) Until shares are first sold to stockholders they are authorized, but unissued caveat venditor. A) The duty to provide the faith and confidence and the duty of care, loyalty and obedience c) At least three of them have to be financially literate State laws usually include the requirements for issuing stock and distributions to stockholders. Double taxation. Ownership evidence by shares of stock 3. 3) Elect Directors Did these ratios get stronger or weaker in 2016 compared to 2015? A closely held business has only a few shareholders. Question: Characteristics of a corporation include? \text{Total}&\underline{\$129}\\ Which is a disadvantage of a corporate structure? a) Internal Auditor i) If you have a good cash flow from operating activities you have a health business d. overhead costs. Assume that the real interest rate, predicted inflation, and inflation are all equal to zero. ii) Formed by filing articles of incorporation with the state 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. While it offers the same liability protection as a C corporation, an S corporation comes with certain restrictions that can limit its . 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. Limited Liability of Stockholders. Assume December 31 falls on a Tuesday, so Lovreks employees have worked 2 days without being paid. Brightstone presently produces and sells 130,000 tires for the North American market at a price of $175 per tire. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $7.50 per tire. i) Shareholders are not authorized to act directly for the corporation, and thus cannot enforce a corporate claim against the managers. Government regualtions. Cooperative : I get along well in a team setting. A number of characteristics distinguish a corporation from a sole proprietor or partnership. Limited liability. 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 4) Was made by a director or directors w/ a personal interest in the decision; or 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. How much does it cost to start a California corporation? They can exist until the business decides to terminate. all the positive, good character traits, at least: Strong (mentally!) vi) No shareholder liability \text{Selling and administrative expenses (45\\\% variable)}&\underline{26}\\ i) Model Business Corporation Act (MBCA) Not a real statute that has been enacted by a legislature. An investment expert makes all of the buy and sell decisions, as source of supply, support, or aid. "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. So let?s get into a list of character traits ? is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. Hard worker 4. a) Partnership is not a taxpaying entity. 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. a) Company, usually with the assistance of independent public accountants, verifies the information it has recorded and the manner in which it has presented the financial accounting, Accounting & Financial Reporting - Bookkeeping, i) Every transaction which a company is involved is included in the company's leger maintaining employment process training and development staff. Ability to raise large capital amounts 2. A corporation is treated as a person with most of the rights and obligations of a real person. " [Leadership] is all about influencing people," said Kirstin Lynde, founder of leadership development firm Catalyze Associates, in a Facebook Live interview. They are honest in relationships. 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. Lovrek Company pays salaries of $12,000 every Monday for the preceding 5-day week (Monday through Friday). The investors vote on the Board of Directors who are responsible for hiring management. Examine these ideal beliefs and significance weights, and then create a verbal description (i.e., concept) of a new brand for these items that would satisfy this student's needs. Ability to raise large amounts of capital High ability 5. The following independent situations require professional judgment for determining when to recognize revenue from the transactions. When you see the list of filings for the company, select the Form 10-K for 2016. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. 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: 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. 5 What are the 4 attributes of corporation? 2) Even if the corporation does well, the holder of the debt security only receives a fixed payment Next to the following list of eight characteristics of business organizations, select a brief description of how each characteristic applies to corporations. For each transaction a through f, identify its impact on the accounting equation (select from 1 through 5 below). - c. $70 per unit These characteristics are as follows: Capital acquisition. 50,000 & 150,000 & 1.00 \\ i) Alter ego is demonstrated "by evidence showing a blending of identities, or a blurring of lined distinctions, both formal and substantive, between two corporations." 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. (Assume all sales were on account.) often referred to as a closely held corporation, usually has only a few stockholders, and does not offer its stock for sale to the general public. 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 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. c. By contrast, any investor with the necessary funds can buy stock in a publicly held firm . a) Company classifies and analyzes the information and presents it in a set of financial statements C) Board members are accustomed to receiving information packets at the beginning of a meeting, rather than in advance 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. 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. A corporation is subject to numerous state and federal regulations. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. to plan your money, and how much will be used and how much will be invested compared to how much you plan on earning. Good people understand that others need praise. 4) Vote on major transactions ii) Income - Dividends = Retained earnings traits. Study online at quizlet/_4on6v. 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 \end{array} Example #4 ? Transferability of ownership Readily transferred 4. A corporation is subject to numerous state and federal regulations. Select one: a. Memorable. Owner liability Limited 7. A company shareholder is personally liable for the debt of the corporation. Instead, it is a separate taxable entity which is taxed at both the corporate and shareholder levels. Terms in this set (8) Some refer to it as a legal person.. Characteristics of a corporation include a. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. H) Board minutes are poorly kept and contain little information on matters discussed during the meetings or actions taken by the board They call their parents regularly. Kremlinomics: A financial buzz word used to describe economic policies which some view to be overly leftist. The corporation?s resources are limited to what the stockholders can contribute. (8) Whether the corporations are treated as independent profit centers (big one); Duration of life 3. Take into account a client who experiences three stages of life: youth, middle age, and old age. A shareholder's liability is limited to the amount he or she paid for the shares. D) Setting clear policies and monitoring the institution's operations for compliance What is the unit product cost using absorption costing? 3 What are the three major sections on a statement of cash flows, and what type of cash inflows and outflows should be included in each section? Legal status 5. A corporation is treated as a "person" with most of the rights and obligations of a real person. The owners of the business entity are representatives of the entity. A corporation can sell shares to new investors, and larger entities can issue bonds to obtain a significant amount of debt financing. 3M. He is not required to consult anybody. A person with ?good character? They are kind to everyone. Relative ease of transferring ownership rights. Example #5 ? We use cookies to ensure that we give you the best experience on our website. Par. (7) Whether the dealing between the entities are at arms length; B) *Single Business Enterprise Doctrine* States that when corporations are not operated as separate entities, but integrate their resources to achieve a common business purpose, each constituent corporation may be held liable for the debts incurred in pursuit of that business purpose Stock Terminology. (4) Overlap in ownership, officers, directors, and personnel; - b.$55 per unit Curiosity (eager to learn!). Which is a characteristic of a generally accepted accounting principles? v) Manager-managed: managers act for LLC; members vote on major matters 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 The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Amazon. Corporations must pay federal and state income taxes as a separate legal entity. 2014 figures for the company are as follows (in thousands): Accounts receivable (net) $279,835; Inventories$536,714; Accounts payable $210,432. J.P. Morgan Chase. Disadvantage of Corporations. 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 iv) Board of directors manage Timeless. 4) Debt securities can be secured or unsecured and are called bonds, debentures, or notes, B) A corporations articles of incorporation specify how many shares of common stock and preferred stock the corporation is authorized to issue Duration of life Unlimited 6. 10) The board and board committees should conduct a rigorous self-assessment at least every two years, Key Responsibilities of Effective Board Members, A) Providing the institution with effective, competent management C) Last in, last out Method visualizes inventory as being added to and sold from the top of the stack, Accounting & Financial Reporting - Fixed Assets , Sometimes referred to as long-term assets or as property plant and equipment, are assets a firm uses to conduct its operations c. The companys rates of return on sales (ROS), average total assets (ROA), and average stockholders equity (ROE), using DuPont analysis. 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors Nature of Communication. CHARACTERISTICS OF A CORPORATION 1. 1) Labor laws that govern employees; environmental law; etc. a. Bridgewater Corp. offered holders of its 1,000 convertible bonds a premium of $160 per bond to induce conversion into shares of its common stock. 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. v) Personal liability Clever : I can juggle multiple tasks. 100,000 & 275,500 & 3.00 Self-Managing It's hard to manage others effectively if you. The liability of stockholders is limited to the amount each has invested in the corporation. 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