Question

Describe and describe the stock corporation. in your response set forth the manner in which a corporation is created as well as the advantages of conducting business in a corporation format. Finally, list and describe the three levels of the corporate hierarchy.

And describe the difference between par value and no par value stock.

Answer 1

Stock Corporation- As the names suggests, Stock corporation is a company that issues stocks to the general public and also distributes dividend from the profit. Stock corporation is a For-profit organization whose primary motive is to earn and increase profit. Common shareholders get the portion of the company's share capital so they are called the owner of the company and they have voting rights.

The manner in which a corporation is created- Corporation is created for doing a business and for starting and running the business, corporation needs capital so it issues shares to the general public and receives money from them. In return shareholders get dividend, bonus shares and capital appreciation.

Advantages of conducting business in a corporation format- Are as following:

1. Corporation can easily get funding from the market by issuing shares.
2. Shareholders are not liable for any debt or obligation.
3. Corporation get many tax benefits as it can deduct costs and expenses.

Three levels of the corporate hierarchy:

1. Top Level
2. Middle Level
3. Lower level

Difference between par value and no par value stock:

Par value is the face value of stock that is mentioned on company's charter and on share certificate while no par value is the value of stock that is issued without par value.