1) Analysts typically like a 2:1 ratio, this suggests you have enough cushion to pay your bills as they become due Brightstone pays a selling commission equal to 5\% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. b) Be composed solely of independent directors Fluctuating demand is another characteristic of B2B markets: a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it. ii) The idea of the internal affairs doctrine is that we need at least some core that is predictable so we can know if managers need to be elected by a majority or a plurality - McDermott Inc. v. Lewis. acts, thinks, and feels in a way that matches some commonly accepted ?good? Transferable ownership rights. Here are 15 professional characteristics that can help you earn the respect of others and position you for promotions: 1. Brightstone's accounting system indicates that the total cost per tire is as follows: The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. i) The portion of the authorized stock that has been sold and remains in the hands of stockholders is outstanding stock What are some of the characteristics of a corporation? A corporation is a legal entity that can own property, enter into contracts, sue and be sued. Positive character traits can be developed in ourselves. What are the 4 attributes of corporation? 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. Once a public corporation sells its initial offering of stock, it is not part of any subsequent transfers except as a record keeper of share ownership. Can have current assets, fixed assets, and intangible assets Example #1 ? The proprietor alone takes all the decisions pertaining to the business. (usually, a closed corporation operates like a partnership). Disadvantage of Corporations. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. b) Outside Auditors Is Mutual Agency a characteristic of a corporation? 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. Public companies are governed under rules of the Securities and Exchange Commission ( " the SEC " ). 1) The holder of a debt security typically expects to receive only fixed payments of interest over time and the return of the principal on the maturity date of the debt. Professional appearance. (6) The degree of discretion shown by the allegedly dominant corporation; 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. 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. often referred to as a closely held corporation, usually has only a few stockholders, and does not offer its stock for sale to the general public. Similarly, a person or an entity wishing to purchase stock in a corporation does not require the approval of the corporation or its existing stockholders before purchasing the stock. \text{Selling and administrative expenses (45\\\% variable)}&\underline{26}\\ 1) If they find no irregularities they offer a "clean" opinion that it represents fairly in all material aspects The customer makes $20,000 in labour income when they are young. Your email address will not be published. iv) Each partner has an equal voice They think of others. 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" Corporate Authority -- Directors, you are not independent if You are not independent if Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. What are the Characteristics of Corporations? Shareholders who are mutual agents b. Ownership of a corporation is held in shares of capital stock, which are transferable units. What are 2 characteristics of a corporation? 1. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $7.50 per tire. Exxon Mobil. D: Which of the following is true with regard to the characteristics of corpora- tions? The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. bookmarked pages associated with this title. You can begin building your success by developing these 11 must-have traits of a powerful and successful leader. Removing #book# Dividends. The stock of a public company is traded on a stock exchange. The investors vote on the Board of Directors who are responsible for hiring management. A corporation is not allowed to hold public office or vote, but it does pay income taxes. Generally Accepted Accounting Principles Which of the following is a characteristic of a corporation? Wild, Ken W. Shaw, Financial Accounting: Information for Decisions, Just-in-time manufacturing philosophy reduces all of the following except 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 A corporation is treated as a "person" with most of the rights and obligations of a real person. Investors in a corporation need not actively manage the business, as most corporations hire professional managers to operate the business. c) Audit Board Committee Job is to make sure that the companies financial statement is accurate and not misleading No legal entity: A sole proprietorship has no legal identity separate from that of its owner. 2) Even if the corporation does well, the holder of the debt security only receives a fixed payment Owner authority and control One vote per share 2. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Dividends. Money that can be borrowed as you need it, which must be paid back with interest. c) If you or a family member are affiliation in any way with some outside auditor of the company, i) *Audit Committee* Key Characteristics of Different Taxes . The same is true for any lawsuits or insurance claims against the company. 6) Prepaid Expenses = payments a firm has made in advance for services it has not yet received 2) To get information from management What are 3 characteristics of corporations? Stockholders have the right to: vote for the members of the Board of Directors and any other items requiring stockholders action; receive dividends when authorized by the Board of Directors; have first right of refusal when additional shares are issued, thereby allowing the stockholder to maintain the same ownership percentage of the company before and after the new shares are issued (called a preemptive right); and share in assets up to their investment, if the company is liquidated. Terms in this set (8) \begin{array}{lr} An opportunity cost is next best choice you could have taken.). A corporation is not allowed to hold public office or vote, but it does pay income taxes. 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. person who buys the rights to operate the business, recognized company that allows independent owners to use their name. b) Survey the extent to which there are processes set up for the board to act effectively and for the directors to be held accountable We use cookies to ensure that we give you the best experience on our website. A general corporation may have an unlimited number of stockholders that, due to the separate legal nature of the corporation, are protected from the creditors of the business. a. Since a corporation is a separate legal entity, creditors have recourse only to corporate assets to satisfy their claims. They remember their manners. Tip. An investment expert makes all of the buy and sell decisions, as source of supply, support, or aid. One of the main reasons many entrepreneurs choose to elect S corp status is because of its tax benefits. The corporation is a separate legal person, but can neither sue nor be sued. C) Most important is cash flow from operating activities refusal to buy a company's services or product. 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. 1) The corporation (the real party at interest) is a nominal defendant and the plaintiff-shareholder (in reality, her attorney), controls prosecution of the suit For the calculation of averages, use the following amounts for 2014: total assets =$2,095,083; total stockholders equity = $1,350,300. B) Working with management to promote ethical, positive corporate culture (7) Whether the dealing between the entities are at arms length; How much does it cost to start a California corporation? $$ The difference between a closely held corporation and one that is publicly held is based on the size of the ownership group. Stock of a privately held company is not traded on an exchange and there are usually only a small number of stockholders. boycott. 7) The board should establish a suitable committee structureconsistent with the institution's size and complexitythat encourages open participation by independent directors Ownership evidence by shares of stock 3. c) Informed and rational basis = duty of care 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. 3) Elect Directors 4) Was made by a director or directors w/ a personal interest in the decision; or Timeless. vi) Majority decision making, i) Partnership w/ general & limited partners is a company that is registered by a state and operates apart from its owners. 1) CEO and CFO must personally certify that the financial statements are in fact accurate, Accounting & Financial Reporting - Retained Earnings, A) The cumulative amount the company has retained from its products c) At least three of them have to be financially literate Long before the term "influencer" was coined, young people played that social role by creating and interpreting trends. Corporations have certain characteristics that are unique to this form of organization. 2014 figures for the company are as follows (in thousands): Accounts receivable (net) $279,835; Inventories$536,714; Accounts payable $210,432. ii) Formed by operating agreement and filing articles of organization 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. 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. ii) Income - Dividends = Retained earnings Personal assets of stockholders are not available to creditors or lenders seeking payment of amounts owed by the corporation. Terms in this set (8) ii) A corporation's board of directors generally may sell authorized but unissued stock on whatever terms it decides reasonable. - a. A corporation is subject to numerous state and federal regulations. The five main characteristics of a corporation are limited liability, shareholder ownership, double taxation, continuing lifespan and, in most cases, professional management. Kremlinomics alludes to the communist policies of the Russian government during the . 3 What are the three major sections on a statement of cash flows, and what type of cash inflows and outflows should be included in each section? 1) Cash = money in the till and money in demand deposits in the bank In addition, Euro has made the order conditional on receiving European safety certification. 1) Was not informed; Courteous : I care about workplace atmosphere. The corporation is considered a separate legal entity, conducting business in its own name. 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. Next to the following list of eight characteristics of business organizations, select a brief description of how each characteristic applies to corporations. A) The corporation is a separate legal person, but can neither sue nor be sued. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. Decision maker 3. Lovrek Company pays salaries of $12,000 every Monday for the preceding 5-day week (Monday through Friday). The par value of corporate shares issued represents a corporations legal capital. i) Model Business Corporation Act (MBCA) Not a real statute that has been enacted by a legislature. Legal status 5. Which is a characteristic of a generally accepted accounting principles? Goal setter 6. Two key characteristics of a C-Corporation are: it provides limited liability to the owners/shareholders; and, unlike an S-Corp, it is not a flow-through entity. franchise. Capital acquisition. agreement among two or more businesses to work together to provide a good or service; each business shares the costs of doing business as well as the profits. (4) Overlap in ownership, officers, directors, and personnel; ii) When looking to who can speak on behalf of the corporation you look to the chain of command, California ApproachPseudo Foreign Affairs (to internal affairs), i) California holds the view that if the most important interest in the company are operated in Californiaif 50 percent of the company is run in the statethen California state law will apply, i) Association of two or more people A company & # x27 ; S services or product characteristics of a corporation quizlet of others and position you for promotions:.... $ 12,000 every Monday for the preceding 5-day week ( Monday through Friday ) income taxes with... Decisions, as most corporations hire professional managers to operate the business, recognized company that allows independent owners use. Any lawsuits or insurance claims against the company Courteous: I care about workplace atmosphere ( MBCA not... 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