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What is the significance of a separate legal identity for the shareholders and management?
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.
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Advantages of public limited company?
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
Form of business owned by many people and has its own identity?
A form of business owned by many people that has its own identity is a corporation. In a corporation, shareholders own the company through shares of stock, and it operates as a separate legal entity from its owners. This structure provides limited liability protection to shareholders, meaning they are not personally responsible for the corporation's debts. Corporations can raise capital more easily by issuing shares and often have a more formal management and governance structure.
What is the practice of combining separate companies?
Shareholders
What does separate legal personality mean?
Incorporated companies have separate legal identities from there directors and member (shareholders). They are recognized as legal persons.
Businesses that have a specific legal identity separate from the identity of the person or persons who operate the business?
corporations
What is a company owned by a group of shareholders called?
A company owned by a group of shareholders is called a corporation. In a corporation, shareholders own shares of the company, which represent their ownership stake. The corporation operates as a separate legal entity, allowing shareholders to limit their personal liability to the extent of their investment. Corporations can be publicly traded on stock exchanges or privately held.
Is additional paid in capital refers to a firm's retained earnings?
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.
What represents businesses that have a specific legal identity separate from the identity of the person or person's who operate the business?
corporations
What represents businesses that have a specific legal identity separate from the identity of the person or persons who operate the business?
corporations
What represents business that have a specific legal identity separate from the identity of the person or persons who operate the business?
corporations
Represents businesses that have a specific legal identity separate from the identity of the person or persons who operate the business?
corporations
Why is it that shareholders receive dividend last?
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.
