Corporate Form of Organization
shareholders
Who are owners of a corporation?
The total number of each class of shares a corporation is allowed to sell.
What are authorized shares?
An organizational body separate from its owners.
What is separate legal existence?
A distribution of the corporation's own shares instead of cash.
What is a stock dividend?
All public corporations must issue these.
What are common shares?
TSX, NYSE, Nasdaq
What are examples of stock markets?
The first time a corporation's shares are offered to the public.
What is an IPO?
Buying or selling shares on a secondary market.
What are transferable ownership rights.
2-for-1; 3-for-1; 4-for-1 are examples
What is a stock split?
They have priority over dividends and assets if the company is liquidated.
What are preferred shares?
A corporation whose shares are held by a few shareholders and are not available for the general public to purchase.
What is a private corporation?
Share Capital and Retained Earnings
What makes up the equity section of the balance sheet?
Money paid to the federal and provincial governments based on a corporation's profits.
What is income tax?
When the Board of Directors authorizes dividends.
What is the declaration date?
The exchange for shares does not involve cash.
What is issuing shares for services or noncash assets?
separate legal existence, limited liability, continuous life, government regulations
What are the characteristics of a corporation?
Proceeds received by the corporation for the sale of shares that cannot be distributed to shareholders.
What is legal capital?
Initial Public Offerings
What is the ability to acquire capital?
Preferred dividends that are not declared in a period when preferred share are cumulative.
What are dividends in arrears?
1 vote for every share held.
What are common shares?
A corporation's "constitution".
What are articles of incorporation?
In Canada, shares that have not been assigned any specific value.
What are "no par value" shares?
Federal and provincial laws that specify the requirements for issuing shares, for distributing income to shareholders, for reacquiring shares, and for the sale of share capital to the general public.
What is government regulations?
The account credited when stock dividends are declared.
What is Stock Dividends Distributable?
When preferred shareholders must be paid dividends from the current year as well as any unpaid dividends from past years before common shareholders receive any dividends.
What is a cumulative dividend feature?