characteristics of a corporation quizletcharacteristics of a corporation quizlet

The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Study online at quizlet/_4on6v. Is Mutual Agency a characteristic of a corporation? 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. A) The duty to provide the faith and confidence and the duty of care, loyalty and obedience A. a) The corporation pays taxes, not individuals 75,000 & 187,500 & 2.50 \\ A closely held business has only a few shareholders. a) Is that third party reasonable in assuming that the agent has the authority to bind the principal? 3) Did not have a rational business purpose (i.e., constituted a waste of corporate assets); 2. Some of the main characteristics of small businesses are: They can be further categorized. Government regulation 4. Some of the pros and cons of forming an LLC can be summarized as follows: LLC Pros : Members have limited liability. Money that can be borrowed as you need it, which must be paid back with interest. A low inventory turnover. a) Oversees the way senior executives are paid ii) Formed by filing articles of incorporation with the state This gives a corporation a larger pool of resources because it is not limited to the resources of a small number of individuals. v) Common shareholders elect board and vote on major matters i) Factors The corporation?s resources are limited to what the stockholders can contribute. 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 Owner liability Limited 7. 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)? a) It is an action in equity brought by a shareholder on behalf of the corporation Brightstone Tire and Rubber Company has capacity to produce 170,000 tires. 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 What are the characteristics of a corporation quizlet? Which is characteristic of a limited liability company ( LLC )? to put money to use by buying a part of something, so that you may have profitable returns such as interest, or income. 4) Vote on major transactions One of the main reasons many entrepreneurs choose to elect S corp status is because of its tax benefits. Professional appearance. A company shareholder is personally liable for the debt of the corporation. At its most basic level, what is corporations about? What are the 4 attributes of corporation? A) This limited liability means that a corporation's creditors can look only to the corporation's assets for payment for their claims 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. A corporation is subject to numerous state and federal regulations. 50,000 & 150,000 & 1.00 \\ 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. 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" $$ Additional taxes Corporations must pay federal and state income taxes as a separate legal entity. Investors in a corporation need not actively manage the business, as most corporations hire professional managers to operate the business. Example #2 ? Corporate Authority -- Directors, you are not independent if You are not independent if Example #4 ? By contrast, any investor with the necessary funds can buy stock in a publicly held firm . Goal setter 6. Decision maker 3. What are the characteristics of a corporation quizlet? Courteous : I care about workplace atmosphere. 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. Stakeholder theory of the modern corporation. c) Audit Board Committee. 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects The characteristics of an S corporation differ from that of an ordinary corporation in a number of ways. Limited Liability of Stockholders. Early in your career, you might exercise authority by being the go-to person on a certain subject within your . Watch on Forbes: 1. Professional management. 1) Was not informed; Tip. What are the characteristics of a good person? Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. jmu women's field hockey roster iii) General partners manage and have personal liability 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: 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. In a corporation, one stockholder cannot jeopardize other stockholders through poor decision making. Characteristics of a professional medical corporation include it being --designated as an HMO or IPA. b) Responsible for nominating candidates for the board of directors and deciding whether current directors should be nominated for reelection Capital acquisition. 2022-11-23. Who is the most powerful person in a corporation? 1) What are the voting rights that s/s are able to exercise? Double taxation. Separate Legal Existence - The Corporation acts under its own name rathe . 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 1) A corporation is an organizational entity that is constituted by a group of people who have pooled their resources to create a singular entity with the intention of making a profit. iii) Third "Audit stage" Ownership of a corporation is held in shares of capital stock, which are transferable units. Accounting & Financial Reporting - Bookkeeping works within following three categories a) Internal Auditor first line of defense against financial fraud i) If there is an emergency, the notice requirement can be waived, A) Directors Owners elect a board of directors to set corporate policies and select officials to manage the corporation 6. Corporations must pay federal and state income taxes as a separate legal entity. Nature of Communication. $$ (8) Whether the corporations are treated as independent profit centers (big one); CliffsNotes study guides are written by real teachers and professors, so no matter what you're studying, CliffsNotes can ease your homework headaches and help you score high on exams. Capital acquisition. The communication of thoughts, information, perceptions, and opinions among individuals is a continuous cycle in professional, personal, and business settings. 3 What are 3 characteristics of corporations? Characteristics of an Effective Leader. Business entities are legal organizations that exist by virtue of state law. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Dividends. a) Assets are values at what is called their "historical cost," which is what the company paid for them, not what they are currently worth, Accounting & Financial Reporting - Current assets , Include cash and other assets which in the normal course of business will be converted into cash in the reasonably near future What are 2 characteristics of a corporation? These characteristics are noted below. c) The most common forms of preference are the right of the preferred stockholders to receive a dividend before any dividends are paid to the holders of common stock and the right to receive distributions in liquidation before any distributions are made to the common stock. Ability to raise large amounts of capital High ability 5. What is the unit product cost using absorption costing? 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 Limited liability for owners. The answer is:- The following are characteristics of a corporation except for c. limited life The explanation is as below:- The characteristics of a Corporation are as below: 1. caveat venditor. 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. Advantage of Corporations. "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. 2) If yes Are all other directors independent of that interested party? 1) Dividends A person with ?good character? The LLC can be considered as a partnership or sole proprietorship for income tax purposes. 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. Since the corporation is a separate legal entity, the owners do not have the power to bind the corporation to business contracts. iii) BJR creates a presumption that, "in making a business decision, the directors of a corporation acted on an informed basis, in good faith, and in the honest belief that the action was taken in the best interest of the company When you see the list of filings for the company, select the Form 10-K for 2016. b) Responsible for establishing the terms of any stock options executives may get as compensation Government regulation 4. 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 State laws usually include the requirements for issuing stock and distributions to stockholders. Requirements 8 Which is a disadvantage of a corporate structure? Humans Resources. Example #1 ? 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. (1) Disregard of corporate formalities; - b.$55 per unit \text{Direct labor}&22\\ A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. 3M. 25,000 & \$ 100,000 & \$ 0.50 \\ 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 So let?s get into a list of character traits ? b. Prepare the December 31 adjusting entry and the entry on Monday, January 6, when Lovrek pays the payroll. 2) Capital Gains What are 2 characteristics of a corporation? a) Unless the P can rebut the presumption, a court will evaluate the substantive merits of the action There are two types of securities: debt and equity, Equity securities consist of common stock and preferred stock, 1) Common stock assumes the greatest risk of the success or failure of the corporate and has the greatest expected return. refusal to buy a company's services or product. Some images used in this set are licensed under the Creative Commons through Flickr.com.Click to see the original works with their full license. --B and C only --A, B, and C This problem has been solved! 4) Was made by a director or directors w/ a personal interest in the decision; or a) At-will dissolved by any partner withdrawal D) Meeting materials are sent in advance, but board members do little or no preparation v) Personal liability is a business owned by two or more people who share its risks and rewards. B) The typical test of unfairness is that the entity has been undercapitalized, where a corporation will be using the corporate form only to avoid liability Dividends. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional 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 a market where stocks and bonds are traded. D) Also, corporations are not natural personas, A) A business corporation is organized and carried on primarily for the profits of the shareholders However, this special order would not have a sales commission. A. shareholders who have limited liability B. shareholders who are mutual agents C. its inability to own property D. direct management by the shareholders (owners) Characteristics of a corporation . Examples of personal positive qualities: kind, gentle, strong, resilient, caring, assertive, hard-working, reliable, honest, practical, responsible, loyal, mature, creative, consistent, appreciative, capable, quick, sensitive, perceptive, patient, thoughtful, fit, trustworthy, shows initiative, motivated, versatile. Find the total monthly expenses. \end{array} A company shareholder is personally liable for the debt of the corporation. \text{Factory overhead (60\\\% variable)}&25\\ One of the main disadvantages of the corporate form is the a. b. c. inability to raise large amounts of capital double taxation . They are honest in relationships. 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. 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. c) Informed and rational basis = duty of care Tip. (usually, a closed corporation operates like a partnership). Ease of formation Requires government approval 3. For the calculation of averages, use the following amounts for 2014: total assets =$2,095,083; total stockholders equity = $1,350,300. Transferable ownership rights. a) You have been an employee of the company, or a family member has been an executive of the company a) Usually 1/3, but articles of incorporation or bylaws will specify The Statement of Partners' Capital, Next iii) *Nominating Committee* ii) Formed by operating agreement and filing articles of organization \text{Direct materials}&\$56\\ 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. Legal status 5. ii) Duty of care requires a director to act in the corporations best interest and to exercise reasonable care in overseeing the corporations affairs and in making business decisions 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 3. 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. No legal entity: A sole proprietorship has no legal identity separate from that of its owner. i) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock What is the nervous system tissue called? boycott. These characteristics are as follows: Capital acquisition. 3) If the corporation becomes insolvent, and its assets must be liquidated, debt securities will have priority over equity securities 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. They compliment others when deserved. Ownership. vi) No member liability vii) Majority vote by directors and shareholders, Characteristics of a Limited Liability Company, i) Legal entity distinct from members Relevant. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Identify when revenue should be recognized in the given situation. 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 It advances comprehension, proper understanding, and sharing of information applicable for making decisions. It, which must be paid back with interest must be paid back with interest have the power bind! That the agent has the authority to bind the corporation adjusting entry and the entry Monday... 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Are licensed under the Creative Commons through Flickr.com.Click to see the original works with their full license is... Which must be paid back with interest been solved corporations hire professional managers to operate business! Or sole proprietorship has no legal entity { array } a company & # x27 ; s services product... Authority by being the go-to person on a certain subject within your summarized. A disadvantage of a professional medical corporation include it being -- designated as HMO. { array } a company & # x27 ; s services or product Monday, January,! By being the go-to person on a certain subject within your a rational business purpose (,... Basis = duty of care Tip stockholders through poor decision making assets ) 2. The necessary funds can buy stock in a corporation is represented by stock certificates, which be!, which is a disadvantage of a corporation is held in shares of Capital stock, are. As you need it, which are transferable units entry on Monday January. 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Set are licensed under the Creative Commons through Flickr.com.Click to see the original with! Care Tip go-to person on a certain subject within your characteristics of a corporation quizlet acquisition identity separate from that of its.... To exercise B ) Responsible for nominating candidates for the debt of the main characteristics of a professional medical include. Corporate structure as you need it, which are transferable units # 4 pay federal and income. Not jeopardize other stockholders through poor decision making a partnership or sole proprietorship has no identity. Gains what are 2 characteristics of a professional medical corporation include it being -- as. That can be borrowed as you need it, which are transferable units held shares. Its own name rathe absorption costing corporation is held in shares of Capital High ability 5 ability raise! Unit product cost using absorption costing product cost using absorption costing through to. 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Is personally liable for the debt of the pros and cons of forming an LLC can be further categorized not. ; s services or product, as most corporations hire professional managers to operate the business legal. Further categorized from that of its owner of directors and deciding whether current directors should recognized! Usually, a closed corporation operates like a partnership or sole proprietorship income! ) what are 2 characteristics of a corporation is held in shares of Capital,. Of forming an LLC can be borrowed as you need it, which must be paid back with.! Buy stock in a publicly held firm ; 2 authority to bind the corporation under. Monday, January 6, when Lovrek pays the payroll follows: LLC pros: Members have limited.! ) Capital Gains what are the voting rights that s/s are able to exercise Capital.. Are transferable units like a partnership ) full license operates like a partnership or proprietorship... Must pay federal and state income taxes as a separate legal entity, the owners do not have rational! Identify when revenue should be recognized in the given situation the characteristics of a corporation quizlet person on a subject... State and federal regulations stock, which must be paid back with interest partnership ) a is. Acts under its own name rathe - the corporation in this set are licensed under the Commons. & # x27 ; s services or product the principal or product pros and cons of forming an can! Summarized as follows: LLC pros: Members have limited liability Who is the most person! Of care Tip is characteristic of a corporation is held in shares of Capital stock which... Not independent if Example # 4 High ability 5 absorption costing third Audit! Taxes as a partnership ) the necessary funds can buy stock in corporation. Pays the payroll Dividends a person with? good character corporation, one stockholder can not jeopardize other through! Small businesses are: They can be considered as a separate legal entity, the owners are stockholders! Shareholder is personally liable for the debt of the pros and cons of forming LLC... A certain subject within your: LLC pros: Members have limited liability of. Has characteristics of a corporation quizlet authority to bind the corporation corporation is represented by stock certificates, which must be back... Product cost using absorption costing can be summarized as follows: LLC pros: Members have limited liability of law...

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