How may corporations in Georgia raise capital?

Study for the Georgia Bar Exam. Prepare with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Corporations in Georgia can raise capital primarily by issuing shares or through shareholder assessments. This method allows a corporation to obtain funds directly from investors by selling ownership stakes in the company. When a corporation issues shares, it provides investors with equity in the company, meaning they own a portion of the corporation and may benefit from dividends and appreciation of share value. Shareholder assessments may also be used to raise additional capital from existing shareholders by requiring them to pay additional amounts for shares they already own.

This approach is fundamental to corporate finance and allows businesses to grow and expand without incurring debt, which can be risky and lead to financial strain.

In contrast, options that involve increasing debt load or selling assets may also be viable, but those methods come with their own risks and considerations. Seeking government funding is generally more restrictive and may not be a straightforward option for every corporation. Thus, issuing shares or asking for assessments from shareholders remains the most direct and flexible method for raising capital.

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