Finance BA240
An organization must prepare ___ and bylaws when forming a corporation.
Articles of incorporation
The rules used by a corporation to regulate its existence are known as ___________.
Bylaws
What are the two basic classifications under which most potential financial goals fall?
Controlling Risk Earning or Increasing profits
A general partnership has which characteristics?
It is difficult to transfer ownership. Each owner has unlimited liability for all firm debts.
Corporations in other countries are often called:
Joint stock companies Public limited companies
In a limited partnership, a limited partner's liability for business debts is
Limited to their cash contribution to the partnership
Since ______ and ownership are separated, a corporations life is unlimited.
Management
How is ownership transferred in a corporation?
Ownership is transferred by gifting or selling shares of stock.
A limited liability company (LLC) is taxed like a _____ and its owners have ____ liability.
Partnership; limited
Which are important when considering a partnership?
Taxation of partnership income Fundraising limitations Personal liability for firm debts
When a corporation is formed, it is granted which of the following rights?
The ability to issue stock. Legal powers to sue. State citizenship for jurisdictional purposes.
The liability of a shareholder in a corporation is limited to:
The amount the shareholder invested in the corporation.
The main goal of financial management is
To maximize the current value per share of existing stock.
The possible goal of profit maximization ____
can be achieved by cost-cutting would probably be the most commonly sighted goal for a business.
A corporation is a distinct --- entity and as such can have a name and take advantage of the legal powers of natural persons.
legal
Businesses are motivated to organize as corporations because stockholders in a corporation have ____ liability for corporate debts.
limited
The owners of a corporation are called
stockholders
Which show why a corporation is the most important form of business?
1. A corporation is a separate legal entity with the ability to acquire and exchange property. 2. Corporations can sue and be sued 3. Corporations can enter into contracts