Corporate GovernanceMG 5326

Class 1Definitions and concepts

Forms of business ownership

• Corporations and companies– Creates a distinct person by certificate of

incorporation or letters patent– Permits separation of ownership and control– 4 possible positions for an individual

• Incorporator• Shareholders• Directors• officers

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Principal characteristics of a corporation

• Liability and the corporate veil– Exception = directors can be liable…

• Transfer of ownership through shares– Does not affect the existence of the

corporation

• Immortality• Raising capital– Through debt or equity (preferred or common)

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