Los 20.b Flashcards
(4 cards)
1
Q
What defines a corporation’s legal identity?
A
A corporation is a separate legal entity from its owners.
Formed by filing articles of incorporation with a regulatory body.
Has rights and responsibilities similar to an individual (hire employees, enter contracts, borrow/lend money).
2
Q
How does a corporation raise capital?
A
A corporation issues shares to owners (shareholders).
This allows the corporation to raise large amounts of capital.
Shares are easily transferable if traded on an exchange.
3
Q
What rights do shareholders have in a corporation?
A
Shareholders have voting rights.
They elect the board of directors who manage the company.
4
Q
A
