2. If you were consulted on which between a stock private corporation or a cooperative should one intending to put up a business must establish, which one will you suggest. Discuss your answer. (Answer in not more than ten sentences.)
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- You are the president of Duke Company and are leading the company through the process of incorporation. The company has determined that common stock shares will be issued, but several key executives at Duke are not quite sure they understand the preemptive right feature associated with common shares. Prepare a memo to your executive team outlining the meaning of this right.Write T if the statement is correct and F if the statement is incorrect. On the space provided, explain using the concepts discussed why your answer to a statement is T or F. 1. A person of minor age can be a shareholder but can never be an incorporator in a corporation. 2. A corporation can be an incorporator in another corporation. 3. A share certificate can be issued to those subscribers who partially paid their subscriptions. 4. A corporation or business partnership can be an incorporator but not a corporator. 5. All partnership can be an incorporator in a corporation. 6. On January 10,2021, Ana paid 90% of her subscription in Jollibee Foods Corporation. She will receive her certificate of stock on January 10,2021. 7. Continued inoperation of a corporation for at least 5 consecutive years will result in its certificate of incorporation being deemed revoked. 8. In case of conflict between the by-laws and the corporation code, the code shall prevail.Which of the following statements is CORRECT? A The stock of publicly owned companies does not need to be registered with and reported to a regulatory agency such as the SEC. B When a corporation's shares are owned by a few individuals, we say that the firm is publicly traded. C "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. D When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. E If a firm goes public, it will always raise additional new capital for the firm itself.
- Which of the following statements is NOT CORRECT? a. It is possible for a firm to go public and yet not raise any additional new capital for the firm itself. b. When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held." c. The stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the SEC. d. When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. e. "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.Which of the following represents one of the basic rights of stockholders? a. Stockholders may sell their stock back to the company if they wish. b. Stockholders may authorize a business contract on behalf of the corporation. c. Stockholders may determine at what price the company issues stock. d. Stockholders may participate in management by voting on corporate matters.Write T if the statement is correct and F if the statement is incorrect. On the space provided, briefly explain using the concepts discussed why your answer to a statement is T or F. 1. A person of minor age can be a shareholder but can never be an incorporator in a corporation.
- Assume you are a CPA and a member of the AICPA, the FEI, and the IMA. You are CFO of a publicly owned corporation whose CEO is planning to become the sole stockholder of a newly established corporation in a situation with characteristics similar to those described in Securities and Exchange Commission AAER 34, “Securities and Exchange Commission v. Digilog, Inc. and Ronald Moyer” (described on pages 234–235). When you inform the CEO of the SEC’s findings in AAER 34, the CEO informs you that the corporation’s independent auditors have provided a copy of a reply by the AICPA’s Technical Information Service to a question involving a situation similar to that in AAER 34 and that the Technical Information Service answer was that consolidated financial statements were not required. The CEO gives you Section1400.07, “Reporting on Company Where Option to Acquire Control Exists,” of the AICPA Technical Practice Aids and orders you not to insist on consolidation of “his” corporation’s financial…Kelvin is considering buying shares in a company. Kelvin asks you to explain to him what is meant by ?he ?erm? ?member? and ??hareholder?? and ?he differen? ?a?? in ?hich a person may become a member. He also asks you to explain who may be eligible to become a member, and how many members a company is permitted ?o ha?e? Finall?? Kel?in a?k? ?How does a person cease to be a member of a company??Required: Advise Kelvin.If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. Can I have this explained because I am thinking this will be classed as capital to the business and if so which one would this be treated as above Gain, Income, or Profit?
- Tristan is thinking about purchasing stock in a corporation. Specifically, Tristan has asked you to explain to him what the terms'membership' and'shareholdership' represent, as well as the many methods in which someone might become a member of the organization. He also wants you to clarify who would be qualified to become a member, as well as how many members a corporation is allowed to have. Finally, Tristan inquires as to how a person might become no longer a member of a corporation.Marty Byrd is debating setting up his new business venture as a corporation. He comes to you for advice. What would you tell him? Include at least 3 advangates and 1 disadvantage to incorporatingIf you were only allowed one, which of the five statements would you select to determine whether or not you would invest in a company? Why?