BBK51 Ch 20

Shareholder

A person who owns shares of stock in a corp. and is thus one of its owners

Capital stock ledger

A subsidiary ledger that contains a record of each stockholder's purchases, transfers, and current balance of shares owned, aka stockholders ledger

Corporation

An artificial being, invisible, intangible, and existing only in contemplation of the law

Disadvantages of Corp.

Corp income tax, govt regulation

Advantages of a Corp

Limited liability, restricted agency (shareholder can't act on behalf of business), continuous existence, transferability of ownership rights, ease of raising capital

Preemptive right

Purchase a proportionate amount of any new stock issued at a later date

Callable preferred stock

Stock that gives the issuing corp the right to repurchase the preferred shares from the stockholders at a specific date

Bylaw

The guidelines for conducting a corp's business affairs

Authorization capital stock

The number of shares authorized for issue by the corporate charter

Stated value

The value that can be assigned to no-par-value stock by a board of directors

preference dividend

a basic or stated dividend rate for preferred stock that must be paid before dividends can be paid on common stock

minute book

a book in which accurate and complete records of all meetings of stockholders and directors are kept

preferred stock

a class of stock that has special claims on the corp profits or, in case of liquidation, on corp assets

corp charter

a doc issued by a state govt that establishes a corp

registrar

a person or institution in charge of the issuance and transfer of a corp stock

Capital stock transfer journal

a record of stock transfers used for posting to the stockholders ledger

Subchapter S corp

advantage, owners have limited liability and avoid double taxation.

dividends

distributions of the profits of a corp to its shareholders

convertible preferred stock

preferred stock that conveys the right to convert that stock to common stock after a specific date or during a time period

LLC

provide limited liability, can elect to have profits taxed at LLC level ir on their individual tax returns

LLP

responsible and have liability for their own actions and the actions of those under their control. Not liable for other partner

participating preferred stock

stock that conveys the right not only to the preference dividend amount but also to a share of other dividends paid

nonparticipating preferred stock

stock that conveys to its owners the right to only the preference dividend amount specific on the stock certificate

cumulative preferred stock

stock that conveys to its owners the right to receive the preference dividend for the current year and any prior years in which the preference dividend was not paid before common SH receive any dividends

organization costs

the costs associated with establishing the corp

stock certificate

the form by which capital stock is issued; the certificate indicates the name of the corp, the name of the stockholder to whom the certificate was issued, the class of stock and the number of shares

common stock

the general class of stock issued when no other class of stock is authorized; each share carries the same rights and privileges as every other share. Even if preferred stock is issued, common stock will also be issued.

liquidation value

value of assets to be applied to preferred stock, usually par value or an amount in excess of par value, if the corp is liquidated