BUSINESS ASSOCIATIONS

   Corporate bargain--limited liability

   I. CHARACTERISTICS OF A CORPORATION

   A. PRINCIPAL CHARACTERISTICS OF A CORPORATION

   a) Entity Status--a corporation is a legal entity created under the authority of legislature

   b) Limited Liability--as a legal entity, a corp is responsible for its own debts; its sh’s liability is limited to their investment;

   c) Free Transferability of Interest--shares, representing ownership interests, are freely transferable;

   d) Centralized Management and Control--a corp’s management is centralised in a board of dirs and officers. Shs have no direct control over the board’s

activities;

   e) Duration--Continuity of Existence--a corp is capable of perpetual existence;

   f) Taxation--a corp, as an entity, pays taxes on its own income; shs are taxed only on dividends;

   g) Remember Attributes of the Corporation--CLIFF: 1) Centralization of management; 2) Limited liability; 3) Forever (perpetual duration) ; 4) Freely

alienable (shares can be sold) .