Incorporation process Flashcards
Stock
Preferred = shareholders get paid first but do not vote Common = shareholders vote
Par Value
is the minimum price for which shares may be sold
an effort to protect grounds for investors to maintain their pro rata (proportion) ownership interest
Authorized Shares
Number of shares that can be sold
Authorized and Issued Shares
Number of shares that can be sold and that have been sold
Incorporation process
Appoint agent for service of process
Officers appointed
Shareholders appoint Directors
Shareholders
Own the corporation
Officers
Run the corporation
Directors
Make long term decisions for the corporation
Dividend Rights
Pecking order on who gets paid first
Voting Rights
Proxy = assign someone to vote in your place
Voting Trust = establishes one person to vote for a group
Liquidation Rights
Shareholders have a preference on who gets paid first
Dissolution
Corporation seizing to exist
Preemptive Rights
Rights of first refusal to purchase
Conversion Rights
Some stock may convert from common to preferred
Redemption Rights
If a corporation doesn’t meet financial goals shareholder can force the corporation to repurchase shares
Very rare
fair market value at time
