Corporate Accounting

Corporate

An entity created by law.

An entity created by law.

Existence is separate from owners.

Existence is separate from owners.

Has rights and privileges.

Has rights and privileges.

Ownership can be

Privately HeldPrivately Held

Publicly HeldPublicly Held

Characteristics of an Corporate

• Voluntary association of persons• Separate legal entity• Common seal• Perpetual succession• Limited liability• Transferable shares• Delegated Management

Meaning of Corporate Accounting

• Corporate accounting refers to the measurement, recording and interpretation of financial information and data relating to a limited company (a public limited company or a joint stock company).

Organizing and Managing a Corporation

Stockholders

Board of Directors

President, Vice-President, and Other Officers

Employees of the Corporation

Organizing and Managing a Corporation

C orpora te O rgan iza tion C hart

Secretary V ice P residentF inance

V ice P residentP roduction

V ice P residentMarketing

President

Board of D irectors

S tockholdersStockholders

usually meet once a year.

Stockholders usually meet once

a year.

Ultimate control.

Ultimate control.

Selected by a vote of the

stockholders.

Selected by a vote of the

stockholders.

Overall responsibility for

managing the company.

Overall responsibility for

managing the company.

Share Capital

• According to Sec 2(46) of the Companies Act 1956, share has been defined as a share in the share capital of the company; and includes stock except where a distinction between stock and share is expressed or implied.

Classes of Shares

Equity shares Preference shares

Participative shares

Convertible shares

Redeemable shares

Cumulative shares

Rights of Shareholders

Vote at stockholders’ meetings.Sell stock. Purchase additional shares of stock.Receive dividends, if any.Share equally in any assets remaining after

creditors are paid in a liquidation.

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