Chapter 11 Flashcards
stockholders
the owners of the corporation
corporation
a business that is recognized as a separate legal entity than its owners
limited personal liability
the concept that the owners of a corporation are not personally liable for the debts of the business
capital stock
transferabel units of ownership in a corporation: includes both common and preferred stock
publicly owned
any corporation whose shares are offered for sale to the general public
public information
information that by law must be made available to the general public. (quarterly and annual financial statements)
state of incorporation
the state in which the corporation was legally formed
stock certificate
certificate that tells how much stock a person owns
board of directors
persons elected by common stockholders to direct the affairs of the corporation
stockholders subsidiary ledger
a record showing the number of shares owned by each stockholder
stock transfer agent
a bank or trust company retained by a corporation to maintain its records and make transfers from one investor to another
paid-in capital (contributed capital)
the amount stockholders invest in a company
par value (stated value)
represents the minimum amount per share invested in the corporation by its owners and cannot be withdrawn without legal action
retained earnings
owners’ equity that has accumulated through profitable business operations
underwriter
an investment banking firm that handles the sale of stock to the public
