In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge. iv) Each partner has an equal voice 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. 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 If you already know that you need a logo for your business, you can use our logo maker to help you create a strong one. Privately held companies may have some restrictions on the transfer of stock. The filing fee for Articles of Incorporation is $100. iii) General partners manage and have personal liability - a. C) Most important is cash flow from operating activities Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc. 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. ii) Board = Agent/Principal a) Internal Auditor A corporation is subject to numerous state and federal regulations. b) Until shares are first sold to stockholders they are authorized, but unissued Government regulation 4. Corporations have a number of distinguishing characteristics. a) Somewhat analogous to apparent authority, can be said that inherent authority is a type of apparent authority Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Corporation acts under its own name rather than in the name of its stockholders. You can begin building your success by developing these 11 must-have traits of a powerful and successful leader. Comment on Bridgewater's treatment of the $160,000 "sweetener. \text{Factory overhead (60\\\% variable)}&25\\ 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)? 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 4) A code of ethics that applies to all officers, board members, and employees should be adopted and monitored for adherence by the board Ownership of a corporation is held in shares of capital stock, which are transferable units. Brightstone presently produces and sells 130,000 tires for the North American market at a price of $175 per tire. Some persons may be employed to help the owner but ultimate control lies with him. Be sure to retrieve the 2016 financial statements, not another year. Direct management by the shareholders (owners) c. Its inability to own property d. Shareholders who have limited liability 3. a) Must be comprised entirely of independent directors $50 per unit 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received Assume December 31 falls on a Tuesday, so Lovreks employees have worked 2 days without being paid. Corporate managment. \end{array} Transcribed image text: All of the following are . Double taxation of dividends c. Charter d. Personal assets of stockholders are not available to creditors or lenders seeking payment of amounts owed by the corporation. i) Factors Influential leaders have a wide collection of skills, including self-confidence, reliability and honesty. Ownership and management are vested in the same person. 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects An entrepreneur is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. 50,000 & 150,000 & 1.00 \\ Less is more, fewer is better, and simple rules are the common mantra here. Cooperative : I get along well in a team setting. These characteristics are as follows: Capital acquisition. Complimenting is not only a good thing to do, but a sign that you can be excited for other people?s triumphs. No legal entity: A sole proprietorship has no legal identity separate from that of its owner. A company with fewer than 100 employees is generally considered a small-sized business, while one with between 100 and 1,500 employees is a medium-sized business. Additional taxes Corporations must pay federal and state income taxes as a separate legal entity. Once the approval is received, the corporation must develop its bylaws. b. Additional taxes. Which is characteristic of a limited liability company ( LLC )? What are 2 characteristics of a corporation? 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Ability to raise large amounts of capital High ability 5. Ability to Acquire Capital. 1) A principal advantage of the corporate form is that a shareholders potential loss is limited to the amount that she invested in the enterprise. The communication of thoughts, information, perceptions, and opinions among individuals is a continuous cycle in professional, personal, and business settings. D) Setting clear policies and monitoring the institution's operations for compliance iii) Perpetual life Who is the most powerful person in a corporation? So, the minimum grand total for forming a California corporation is $125. i) External affairs of a corporation are generally governed by the law of the place where the activities occur and by federal and state regulatory statutes rather than by the place of incorporation "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. is someone who attempts to earn money and make profits by taking the risk of owning and operating their business. Key Characteristics of Different Taxes . E) Knowing where the institution stands and staying abreast of its financial health For the calculation of averages, use the following amounts for 2014: total assets =$2,095,083; total stockholders equity = $1,350,300. I) No assessment of the board, its committees, or individual directors is ever performed to determine the effectiveness or contributions made to the institution's decision-making process or success, Alexander Holmes, Barbara Illowsky, Susan Dean, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Elliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson, Information Technology Project Management: Providing Measurable Organizational Value. A) No requirement that a corporation incorporate in the state of its principal place of business, it can incorporate under the laws of whatever state best suits its needs 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. a) Usually 1/3, but articles of incorporation or bylaws will specify Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? The Statement of Partners' Capital, Next How does the CPI differ from the Myers-Briggs test? These characteristics are noted below. iii) Corporate managers who breach their fiduciary duties can be held personally liable for any losses they cause the corporation, i) In order to encourage directors to take risks on behalf of the corporation w/out fear of personal liability for any losses which may ensue, courts have developed this rule One of the main disadvantages of the corporate form is the a. b. c. inability to raise large amounts of capital double taxation . 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 (2) Inadequate capitalization (big one); These taxes are substantial; they can amount to more than 40% of taxable income publicly held corporation Top 9 Examples of Most Common Corporations. maintaining employment process training and development staff, Latin for "let the seller beware"; sellers need to take responsibility for the products they sell, process by which people attempt to preserve, protect, and manage resources, one who selects, purchases, uses, or disposes of services or goods, a movement to pass laws that protect the consumer from unsafe and unfair business practices, basic rights of consumers to safety, to be heard, to choose, to be informed, to have problems corrected, to consumer education, and to service, business practices that are deliberately misleading, the legal responsibility a manufacturer has to make a safe product, collecting items for processing so that they might be used again, when someone advertises a product at a low price to lure consumers into the store, then tries to get them to switch to a more expensive item, a card allowing someone to make a purchase on borrowed money. A) The duty to provide the faith and confidence and the duty of care, loyalty and obedience C) The purpose of the doctrine of piercing the corporate veil is to prevent an independent corporation from being used to defeat the ends of justice to perpetuate fraud, to accomplish a crime, or otherwise to evade the law, Piercing the Corporate Veil -- Tort Creditors vs. Contract Creditors, A) Courts make the distinction between contract creditors and tort creditors Its charter may limit the corporation's life although the corporation may continue if the charter is extended. No managerial skills needed from stockholders because decisions are made by the Board of Directors. What are 3 characteristics of corporations? a) It is an action in equity brought by a shareholder on behalf of the corporation provide goods and services to business and individual. 75,000 & 187,500 & 2.50 \\ 1) What are the voting rights that s/s are able to exercise? i) Accrual method says that what we want to do is determine when you are entitled to receive revenue and when we want to record that during that period A. 2) Note that these outside auditors are hired by management are in a position that their performance will decide whether they are hired next year and so on, creating its own issues Public companies are governed under rules of the Securities and Exchange Commission ( " the SEC " ). caveat emptor. What does a universal WiFi Internet adapter do? Legal status 5. 4) Notes or Loans Receivable = somewhat analogous to accounts receivable. In a corporation, one stockholder cannot jeopardize other stockholders through poor decision making. \text{Selling and administrative expenses (45\\\% variable)}&\underline{26}\\ c. The companys rates of return on sales (ROS), average total assets (ROA), and average stockholders equity (ROE), using DuPont analysis. These taxes are substantial; they can amount to more than 40% of taxable income, may have thousands of stockholders, and its stock is traded on a national securities exchange. 1) Generally, this means a member must be able to read and understand fundamental financial statements One of the main reasons many entrepreneurs choose to elect S corp status is because of its tax benefits. 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. \begin{array}{lr} The corporation is a separate legal person, but can neither sue nor be sued. 3M. A corporation is treated as a "person" with most of the rights and obligations of a real person. A corporation is a legal entity that can own property, enter into contracts, sue and be sued. Owner liability 8. Example #1 ? 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) Any independent internal audit function (even if part-time) should be in place and report directly to the audit committee the making of a program to manage finances through budgeting and investment. 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 The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Capital acquisition. 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