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CHAPTER 26 The Law of Corporations

CHAPTER 26 The Law of Corporations. 26-1 Founding a Corporation 26-2 Shareholders, Directors, and Officers 26-3 Corporate Powers and Termination. 26-1 Founding a Corporation. GOALS Compare the advantages and disadvantages of the corporate form Explain the steps in corporate formation.

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CHAPTER 26 The Law of Corporations

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  1. CHAPTER 26The Law of Corporations 26-1 Founding a Corporation 26-2 Shareholders, Directors, and Officers 26-3 Corporate Powers and Termination

  2. 26-1 Founding a Corporation GOALS • Compare the advantages and disadvantages of the corporate form • Explain the steps in corporate formation Chapter 26

  3. FOCUS • What is a corporation? Chapter 26

  4. ATTRIBUTES OF THE CORPORATE FORM • Advantages of the corporate form • Perpetual life • Limited liability • Transferability of ownership interests • Ability to attract large sums of capital • Professional management • Disadvantages of the corporate form-taxed twice, corp and personal taxes Chapter 26

  5. Explain the corporate advantage of limited liability. Chapter 26

  6. Types of Corporations • Public • Private • Public service-utilities Chapter 26

  7. HOW IS A CORPORATION FORMED? • The role of promoters-people who are forming corporation before articles of incorporation • Articles of incorporation-birth certificate • The role of incorporators-capacity, these are the promotors after the articles of incorporation are signed • Corporate charter-explains what the company’s purpose is Chapter 26

  8. What is the difference between a promoter and an incorporator? Chapter 26

  9. Let’s Try It! • Go to this web site- • http://www.dos.state.fl.us/startbus/register.html Chapter 26

  10. 26-2 Shareholders, Directors, and Officers GOALS • Understand the types of stock shareholders may own • List the rights of shareholders • Explain the roles of corporate directors and officers Chapter 26

  11. FOCUS • Who controls a corporation? Chapter 26

  12. THE ROLE OF SHAREHOLDERS • Types of stock • Par and no-par stock- • Par has face value printed on certificate • Common stock-has voting right • Preferred stock-no voting right, but can collect dividends Chapter 26

  13. THE ROLE OF SHAREHOLDERS (continued) • Shareholder rights • Right to a stock certificate • Right to transfer shares • Right to attend shareholder meetings and to vote • Right to increase capital stock • Right to share the profits • Right to share in a distribution of the capital • Right to inspect corporate books of account Chapter 26

  14. Name the most significant powers of a common shareholder. Chapter 26

  15. THE ROLES OF DIRECTORS AND OFFICERS • Board of Directors • Directors as fiduciaries • Requirements for directors • Duties of directors • Officers are • President, vice presidents, CEO, COO • Director level of management Chapter 26

  16. 26-3 Corporate Powers and Termination GOALS • Explain the powers of a corporation • Relate the various ways that the dissolution of a corporation might be brought about Chapter 26

  17. THE POWERS OF A CORPORATION • Power to conduct business • Power to continue indefinitely • Power to operate under a name of its own choosing • Power to make rules to govern its operation • Implied powers Chapter 26

  18. What are bylaws? Rule of Governing Chapter 26

  19. CAUSES OF CORPORATE DISSOLUTION • At a time specified in the articles of incorporation • By agreement of the shareholders • By forfeiture of the charter • By consolidation or merger • As a result of bankruptcy • By court order Chapter 26

  20. What is the difference between a consolidation and a merger? Page 482. Chapter 26

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