Stock corporation

Stock corporations are corporations which have capital stock divided into shares and have authority to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of shares held.

Stock corporations are organized for profit.

The governing body of a stock corporation is usually the board of directors (BOD). There are certain exceptions such as in the case of close corporations.

A corporation is deemed to have the power to declare dividends as long as it has capital stock AND there is no prohibition in its articles of incorporation or in its by-laws for it to declare and distribute dividends, such corporation is a stock corporation.

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