MUHASEBE II

• Corporations are separate legal entities. They are organized independently of their shareholders

• Shareholders have limited liability in cor-porations.

• Corporations have continuous lives.

• Transferability of ownership is easy in cor-porations in comparison to other types of entities.

• Raising more capital can be easy in cor-porations in comparison to other types of entities.

• Vote: Coequal shareholders legally own the corporation. They can manage the corpora-tion indirectly through a board of directors they elect. Shareholders vote on some mat-ters at shareholders’ meetings. In normal conditions, each share carries one vote.

• Dividends: When declared, shareholders receive a proportionate of some dividend. Generally, each share receives an equal amount of dividend.

• Liquidation: When a corporation goes out, shareholders may receive their proportion-ate share of any asset that still remains.

• Preemption: Shareholders have the right to maintain their proportionate ownership in corporations.

• Receiving Information: Shareholders have the right to access information related to the corporation

The management of the corporation may want;

• to avoid a takeover and be cautious about outsiders.

• to reissue the shares to employees and reward them.

• to promote the price of the shares by in-creasing the trading of the shares.

• to resell its own shares with a higher price.

• to reduce the number of outstanding shares for some ratio analysis