What are the main types of business entities in Georgia? The main types of business entity discussed in this chapter are: Sole Proprietorships - The sole proprietorship is not considered a separate business entity, but it is the basis from which business entities are...
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Characteristics of Corporate Ownership Interests
What are the many variations in characteristics of the ownership structure of the corporations in Georgia? At the time of formation, a corporation authorizes shares to issue to shareholders in exchange for capital. Promoters and Stock Subscription Agreements - Often...
Corporate Governance and the Sarbanes-Oxley Act (SOX)
What is the Sarbanes-Oxley Act? The Sarbanes-Oxely Act (SOX) is the primary federal law governing corporate governance and accountability across multiple aspects of corporate business practice. SOX specifically regulates markets, brokers, dealers, accounting and...
Rights and Role of Shareholders of the Corporation
What is the role of shareholders of the corporation? Shareholders are the owners of the corporation. They have ownership rights in the shares of corporate stock. The role of the shareholder in the corporation is limited, however, as they have neither the right nor the...
What is a Hostile Takeover?
What is a hostile takeover and what effect does it have upon corporate governance? A hostile takeover is where a third-party acquirer seeks to purchase a controlling number of outstanding shares without the endorsement or approval of the target companys board of...
Hostile Takeover Defense – Shark Repellent
Anti-takeover Measures in Corporate Governance When an acquirer attempts a hostile takeover, boards of directors commonly institute measures to thwart the acquirers attempts to gain control of the corporation. Some common measures employed are as follows: Shark...
Delay Tactics – Hostile Takeover Defense
Buying Off Acquirer Often the corporation will attempt to provide benefits to the acquirer that will incentivize it to give up its efforts. These efforts are generally not in the best interest of existing shareholders and can lead to litigation. Target Share...
Role and Purpose of Corporate Entity Form
What is the role and purpose of the corporation? The concept of the corporation originated through governmental charter allowing individuals to carry on business collectively. Basically, the charter gave the corporate entity form legal status that was similar to...
Agency Theory of Corporate Governance
What is agency theory and why is it relevant for the business entity? Agency theory posits that corporations act as agents of its shareholders. That is, shareholders invest in corporate ownership and thereby entrust their resources to the management of the directors...
Corporate Governance and the Dodd Frank Act
What is the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)? Dodd-Frank was passed in response to the financial downturn beginning in 2007. While Dodd-Frank imposed extensive controls on banks and other lending institutions, it also prescribed...