Chapter 11 - Corporations: paid-in capital. This chapter presents the following content: Corporation, organization of a corporation, stockholders’ right, advantages of incorporation, disadvantages of incorporation, overview of stockholders’ equity,. | Corporations: Paid-in Capital Corporation A group of persons authorized to act as a separate legal entity Same privileges and responsibilities as an individual Enter into contracts Sue or be sued Own, buy, and sell property Organization of a Corporation Stockholders Board of Directors Management Stockholders’ Right Vote at stockholder’s meetings Sell or dispose of shares of stock Participate in corporate profits by receiving dividends when declared Maintain one’s percentage ownership (preemptive right) Participate in distribution of assets on liquidation Advantages of Incorporation Ability to generate capital investment Ease of transfer of ownership Continuity of life Limited liability Professional management Disadvantages of Incorporation Cost of incorporation Increased regulation Double taxation Separation of ownership and management functions Overview of Stockholders’ Equity Paid-in capital Stock - par Excess over par or stated value Donations Retained earnings Undistributed . | Corporations: Paid-in Capital Corporation A group of persons authorized to act as a separate legal entity Same privileges and responsibilities as an individual Enter into contracts Sue or be sued Own, buy, and sell property Organization of a Corporation Stockholders Board of Directors Management Stockholders’ Right Vote at stockholder’s meetings Sell or dispose of shares of stock Participate in corporate profits by receiving dividends when declared Maintain one’s percentage ownership (preemptive right) Participate in distribution of assets on liquidation Advantages of Incorporation Ability to generate capital investment Ease of transfer of ownership Continuity of life Limited liability Professional management Disadvantages of Incorporation Cost of incorporation Increased regulation Double taxation Separation of ownership and management functions Overview of Stockholders’ Equity Paid-in capital Stock - par Excess over par or stated value Donations Retained earnings Undistributed earnings from operations Stock Terminology Authorized Maximum number of shares allowed by charter Issued Number of shares transferred to stockholders Outstanding Number of shares currently in hands of stockholders Stock Terminology Par value Dollar amount assigned to each share of stock by charter Stated value Dollar amount assigned to each share of stock by board of directors No-par value Stock without a par value Legal Capital Minimum amount of capital that must be left in the corporation by actions of the board of directors for protection of the creditors Par-value - par value of issued shares Stated value - stated value of issued shares No-par - total proceeds of stock Classes of Stock Common stock Residual class of ownership Controlling owners Unlimited dividends Preferred stock Receive dividends before common Receive liquidation before common Preferred Stock Stated dividend rate Percentage of par Dollar amount per share Cumulative Undeclared dividends accumulate Unpaid dividends are .
