Final answer:
The number of shares outstanding for a company is the difference between the number of shares issued and the number of shares in treasury. Shareholders own portions of a company's stock, representing partial ownership. Corporations benefit from limited shareholder liability and easier capital raising capabilities.
Step-by-step explanation:
The number of shares outstanding is a key metric for a corporation and it is calculated by taking the number of shares issued and subtracting the number of shares held in treasury. For example, if a corporation has issued 1,000 shares and holds 100 shares in its treasury, the number of shares outstanding would be 900 (1,000 issued shares - 100 treasury shares).
Shareholders are individuals or entities that own at least some portion of a firm's stock, thereby holding partial ownership of the company. A sole proprietorship, unlike corporations, is run by a single individual and does not issue stock. Corporations have the ability to raise financial capital by selling stock, potentially from venture capital, or through other means like issuing bonds such as Treasury bonds.
Shareholder liability is limited to the amount they have invested in the company, so they cannot lose more than their investment. This advantage makes the raising of capital easier for corporations compared to other forms of business ownership.