Marshall's Corporation and Voucher Accounting
Description:... Excerpt from Marshall's Corporation and Voucher Accounting
A Corporation is an organization of persons, specially authorized by law to act as one person. Corporations have certain general powers, rights, and responsibilities which are specified by the law under which the corporation is created.
A Charter is a formal document issued by the proper authority, setting forth the power, purposes, and term of existence of a corporation, and by the issuance of which the corporation attains to a legal existence.
Classification - Corporations are either Public or Private. Public corporations include the persons of an entire community, as a city, or town, and are formed for governmental purposes. Private corporations are those formed by the voluntary association of individuals, and include all corporations not public.
Private corporations are further classified into: -
1. Religious, or those comprising churches or other religious societies.
2. Benevolent, or those formed for promoting educational, charitable or fraternal undertakings, as colleges, fraternal societies, hospitals, etc.
3. Commercial, or those organized for pecuniary gain, as the various companies formed for manufacturing, trade, transportation, and other business purposes. Commercial corporations are often spoken of as joint stock companies.
We limit our attention here to commercial corporations, or companies. The powers, privileges and obligations of these organizations, vary considerably in the different states, and it is always necessary for those who form commercial corporations to consult carefully the state or national laws under which the proposed company is to be organized.
The Stock of a commercial corporation is the money or other capital which it is proposed to invest in the concern, and which is represented by a certain number of shares, usually of the denomination of $25, $50, or $100 each. An agreement to take or subscribe for these shares constitutes the first formal step in the organization of a corporation.
Procedure in the Organization of a Commercial Corporation.
Preliminary Discussion, Promotion, Etc. - A corporation may be originated as an entirely new business enterprise, or it may be formed in order to make more effective a business already established as a partnership, or single proprietorship. Corporations are also frequently formed to combine a number of existing corporations, or other business concerns into a single company. Combinations of this kind, are frequently, but improperly spoken of as "trusts."
The first step in the formation of a corporation, is an informal discussion among the proposed incorporators, as to the advisability of forming the company. Frequently the formation of a corporation is brought about through the efforts of some individual, who makes it his business to induce others to join in organizing the company. The business of bringing about the organization of companies in this way is called "promoting," and the person who accomplishes it is known as a "promoter." The promoter of a corporation, usually receives a certain per cent of the stock as compensation for his services.
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