liability of company does not flow through to owners except in certain circumstances (lifting corporate veil- fraud, neglicence, fraudulent misrpesentation). a company is a legal entity like a person. shareholders do not assume any liability/responsibility of company, but shares in profit/losses to the degree of the investment.
1) The company has a legal existence separate from management and its members (the shareholders) 2) Members' liability is limited 3)New shareholders and investors can be easily acquired
Shareholders
Incorporated companies have separate legal identities from there directors and member (shareholders). They are recognized as legal persons.
corporations
corporations
corporations
corporations
corporations
To separate slave and free states
Additional paid in capital (or APIC) is a component of the shareholders equity section of the balance sheet. Retained earnings is a separate component of shareholders equity.
Shareholders assume the least amount of risk in comparison to other members of a company. They are separate legal entities, which means that they are only responsible for their investment in stock(s) of the company. If the company was in a financial struggle debt collectors cannot come after shareholders for cash because they are separate legal entities. Since they assume the least amount of risk, they receive dividends last.
To separate slave and free states