Chapter 14 Flashcards
what type of company as a limited number of shares
private
How many shares is a private company generally limited to
50 shares maximum
can a private company’s shares be traded publicly?
no
what is often stated for private shares
the agreement describes the way in which shares can be transferred
What can private companies use IFRS or ASPE?
either
What happens with public companies’ stocks
their securities, debt or equity, are traded on stock exchange
what do shares represent
ownership in a company
can publicly traded shares be bought or transferred by shareholders without the consent of the corporation
yes, unless there is an enforceable agreement to the contrary
A corporation may be authorized to issue several different classes of shares each with distinctive rights and privileges
what might be different about the different classes
dividends entitlements and voting rights are characteristics that might be altered among classes
describe common shares
- have voting rights
- receives the residual interest (if any) in the assets if the company are liquidated or dissolved and
- dividends paid only when declared
what are special shares
may have multiple votes
what are restrictive shares
may be non-voting
Preferred shares confer certain preferences, or differences, over common shares
Preference may involve one of the following (7)
- limited voting or nonvoting rights
- receive dividends before the common
- cumulative or non-cumulative
- participating - right to share in additional dividends
- priority over common on liquidation
- convertible to other securities
- guaranteed return by redemption or retraction
what are par value shares
have a designated dollar amount per share, as stated in the articles of incorporation
who allows par value shares
limited number of provincial business corporations acts (not allowed by CBCA and other provinces)
on issuance, par amount is assigned to the
share account
on issuance, premium amount received over par is allocated to what
a separate account in equity
what is another name for common shares
residual ownership shares, since they get whatever is left after the creditors and other investors have had their share in earnings and net assets
what kind of risk do common shareholders have
risk over ownership. they are at risk with respect to their original investment and return on that investment. they also have the rewards of ownership since they get the residual of earnings and have control over the company through their voting shares
what are no-par shares
do not carry a designate or assigned value per share
- the entire amount of proceeds received is credited to share capital
what type of share may have a guarantee on their invested principal?
preferred shares
no
no
what is issued share capital
the number of shares that have been issued to shareholders to date
what is outstanding share capital
issued and currently owned by shareholders
what is subscribed shares
un-issued shares set aside to meet subscription contracts
no par value shares issued for cash: when shares are issued what happens
a certificate, specifying the number of shares represented, is prepared for each shareholder