Owned by a group of people and authorized by the state
A group of people must get permission to form a corporation, organizers must obtain a charter.
The owners of a cooperation are called stockholders, which is divided into equal parts called shares. A person who buys a share becomes a stockholder. Therefore thousands of people can own a cooperation.
Board of Directors
Close and Open Corporations
Open Corp. is one that offers its shares of stock for public sale.
Preparing the Certificate of Incorporation
Naming the Business
(Required by law to have a name that indicates a corp has been formed)
Stating the Purpose of the Business
(Required by law to described your purpose clearly)
Investing in the Business
(Must have to correct amount to invest in the corp.)
Paying Incorporation Costs
(Must pay an organization tax based on the amount of capital stock)
Operating the New Corporation
( To prepare a balance sheet or statement of financial position)
Handling Voting Rights
( Owners agree to have the equal amount of votes and stockholders get the number of shares they own to vote)
Management Issues for Corporations
Sources of Capital