Parcoac - Corporation
Parcoac - Corporation
Parcoac - Corporation
CORPORATION
Promotion
A Corporation is an artificial being created by Incorporation
operation of law, having the right of succession and Commencement of the business
the powers, attributes, and properties expressly *Under PAS 38- Organization costs are charged to
authorized by law or incidental to its existence. expense in the period incurred (before- assets that
A business entity recognized by law with existence were amortized)
separate and distinct from its owners. *5 years to commence business (registration
A corporation can… validity)
- Sue and be sued
SHARE CAPITAL
- Hire and fire employees
- Borrow money Also known as the capital stock
- Enter into contracts It is the amount fixed by the corporate charter to be
- Buy, sell, or hold property subscribed and paid or secured to be paid by the
shareholders of a corporation either in money or in
Advantages of a Corporation property, labor, or services upon the organization of
Limited liability the corporation or afterwards; and upon which it is
Easy capital generation to conduct its operations.
Professional management Two classes:
Separation of owners and entity o Ordinary
Continuous existence (50 years and renewable; will o Preference
not dissolve) Share capital may have
Easy transfer ownership (no consent needed) o Par value- is the nominal or face value assigned
on the face of the stock certificate and in the
General Terms articles of incorporation (par is not an indication
Incorporators- Persons who form a corporation of market value)
Articles of incorporation- Application for o No par value- has no par or stated value. It has
corporate charter no nominal value stated either in the articles of
Corporate charter- Contract between state and incorporation nor on the face of the stock
incorporators granting legal existence to the certificate (market value will be its value)
corporation o No par value with a stated value- stock
Corporate bylaws- Rules adopted by the board of without par value, but to which a stated value
directors to govern conduct of corporate affairs has been assigned by the board of directors
Organization costs- legal and accounting costs (found in articles of incorporation)
Subscribers- Agreed to take original, unissued o *Per Corporation Code of the Philippines, no-
shares but will pay at a later date par share capital is issued for a consideration of
Corporators- Persons who compose the corporation not less than P5.00.
whether shareholder/stockholders (stock) or Classes of Share Capital
members (non-stock)
Promoters- persons who look for investors; Preference (Preferred)
organize the corporation o Preferences include:
Underwriters- Dispose the shares to the public 1. Dividends
2. Priority in case of liquidation
Board of Directors o A dividend rate is usually expressed wither as a
Hire corporate officers percent of par value or as a PESO amount per
Formulate corporate policies share.
Elected by the shareholders Ordinary (Common)
Composition (5 to 15 - old corporation code) o Residual Equity- all other claims against the
corporation’s assets, including those of creditors,
Corporate officers rank above the claims of ordinary share holders
Includes president, vice presidents, secretary, and 1. Is not automatically entitled to dividends
treasurer 2. Does not have asset preference in
liquidation
Carry out policies set by the board of directors
Responsible for routine corporate operations (TYPES OF PREFERENCE SHARES)
Authorized Share Capital
The maximum number of shares that a corporation
may issue.
AOI must be amended to issue more shares
2 methods to record authorized share capital:
o Journal entry method
o Memorandum entry method
Memorandum Entry Method
Entry:
Authorized to issue XXX ordinary share capital with
a par value of P—
Authorized to issue XXX preference share capital
with a par value of P—
Journal Entry Method
Entry:
Unissued ordinary share capital xx
Authorized ordinary share capital xx
Unissued preference share capital xx
Authorized preference share capital xx
ISSUANCE OF SHARES
The Joyful Company was organized on Jan, 1, 2021 with
authorized share capital as follows:
- 10,000 shares of 10% preference share capital
with par value of P100 per share
- 200,000 shares of ordinary shares with par value
of P10 per share
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