An Evaluation of the Accounting Provisions Contained in the Ohio General Corporation Law.

Abstract The article evaluates the accounting provisions contained in the Ohio General Corporation Law. In addition to providing the authority for individuals to use the corporate device for the conduct of business, corporation statutes contain regulatory requirements designed to protect the rights and interests of investors. Regulation is necessary because the corporation is legally an entity apart from the creditors and owners who provide the capital with which it operates. Requirements relating to accountability and disclosure are a means of safeguarding rights of investors. The evaluation of the propriety of any legal requirement must be in terms of the public interest. Since the corporate form of organization is predicated upon an assumption of continuity, a permanent division between invested capital and earnings is necessary. It is in the public interest that the statutes recognize this distinction in the requirements relating to legal (stated) capital, surplus, dividends, and share acquisitions. In addition, these requirements must insure an accurate accountability and disclosure of those transactions, which affect the corporate equities.