Corporations: Corporation and Shareholders Powers Shareholders
CHAPTER 19 CORPORATIONS
1. – THE NATURE AND CLASSIFICATION OF CORPORATIONS
A corporation is a legal entity created and recognized by state law. It can consist of one or two persons identified under a common name.
CORPORATE PERSONNEL
When an individual purchases a share of stock in a corporation, that person becomes a shareholder and owner of the corporation. Shareholder and corporations are liable.
THE LIMITED LIABILITY OF SHAREHOLDER
One of the key advantages of the corporate forms is the limited liability of its owners. Corporate shareholders normally are not personally liable for the obligations of the corporation beyond the extent of their investments.
CORPORATE TAXATION
Corporate profits are taxed, and do not receives tax deduction for dividends distributed to shareholders. Profits that are not distributed are retained by the corporation. These retained earnings if invested properly, will yield higher corporate profits in the future.
TORTS AND CRIMINAL ACTS
A corporation is liable for the torts committed by its agents or officers within the course and scope of their employment. Corporation may be held liable for criminal acts of its agents and employees, provided the punishment is one that can be applied to the corporation, corporation can be fined.
CORPORATION SENTENCING GUIDELINES
Penalties depend on factors and executives involvement. Corporate lawbreakers can face fines smaller amounting or to hundreds of millions of dollars. When a company has taken substantial steps to prevent, investigate, and punish wrongdoing, such as by establishing and enforcing crime prevention standards, a court may impose less serious penalties. Corporate sentencing guidelines require corporations to train employees on how to comply with relevant laws.
CLASSIFICATION OF CORPORATIONS
Domestic, foreign, and alien corporations * Domestic corporation; by its home state (the state in which it incorporates). * Foreign corporation;
1. – THE NATURE AND CLASSIFICATION OF CORPORATIONS
A corporation is a legal entity created and recognized by state law. It can consist of one or two persons identified under a common name.
CORPORATE PERSONNEL
When an individual purchases a share of stock in a corporation, that person becomes a shareholder and owner of the corporation. Shareholder and corporations are liable.
THE LIMITED LIABILITY OF SHAREHOLDER
One of the key advantages of the corporate forms is the limited liability of its owners. Corporate shareholders normally are not personally liable for the obligations of the corporation beyond the extent of their investments.
CORPORATE TAXATION
Corporate profits are taxed, and do not receives tax deduction for dividends distributed to shareholders. Profits that are not distributed are retained by the corporation. These retained earnings if invested properly, will yield higher corporate profits in the future.
TORTS AND CRIMINAL ACTS
A corporation is liable for the torts committed by its agents or officers within the course and scope of their employment. Corporation may be held liable for criminal acts of its agents and employees, provided the punishment is one that can be applied to the corporation, corporation can be fined.
CORPORATION SENTENCING GUIDELINES
Penalties depend on factors and executives involvement. Corporate lawbreakers can face fines smaller amounting or to hundreds of millions of dollars. When a company has taken substantial steps to prevent, investigate, and punish wrongdoing, such as by establishing and enforcing crime prevention standards, a court may impose less serious penalties. Corporate sentencing guidelines require corporations to train employees on how to comply with relevant laws.
CLASSIFICATION OF CORPORATIONS
Domestic, foreign, and alien corporations * Domestic corporation; by its home state (the state in which it incorporates). * Foreign corporation;