Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей

Corporation
A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей stock certificate is called a stock-holder.

There are several advantages of the corporate form of owner­ship. The first is the ability to attract financial resources. The next advantage is that a corporation Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей attracts a large amount of capital it can invest it in plants, equipment and research. And the third advantage is that a corporation can offer higher salaries and thus attract talented Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей managers and specialists.

The privately owned business corporation is one type of corpo­ration. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such corpo­ration does Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей not issue stock and is nonprofit. If there is a profit it is reinvested in the institution rather than distributed to private stockholders.

In some western countries, cities, states, federal government Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей and special agencies can establish governmental corporations. A few examples of these governmental corporations are state hospi­tals and city owned utilities. Governmental corporations are non-profit as a rule and usually Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей they do not issue stock certificates.

^ Business Partnerships in the USA

When a proprietor wants to expand a business, one way to do it is to form a partnership, a business formed for Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей profit by two or more co-owners. The rights and duties of a partnership are regulated by laws of the state where it is formed and by a legal agreement entered Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей into by the co-owners. Usually an agreement specifies the amount of the money each is investing and duties each partner assumes. A partnership agreement also may provide for a «silent partner» who does Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей not take part in the management, but who invests money in the business.

The partnership has the advantage of pooling managerial tal­ent. One partner may be qualified in production Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей, another in market­ing. The partnership, like individual ownership, is exempt from most of the reporting that the government requires of corporations. Furthermore, it has a favorable tax position when compared Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей with the corporation. Federal taxes are paid by individual partners on their share of earnings; beyond that the business is not taxed.

A major disadvantage of the partnership is that each member Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей is liable for all the debts of the partnership; the act of any partner is legally binding upon the others. If one partner takes a large amount of money from the business Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей and squanders it, the others must pay the debt. Partnerships suffer another major disadvantage: decision-making is shared. If partners have serious and constant disagree­ments, the business is bound to suffer.

^ Nonetheless Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей, the partnership remains a vital part of the overall business economy.

Large Corporations in the USA

Although there are many small and medium-size corporations, bigger business units are needed to Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей perform certain services in the vast economy. Large corporations can supply goods and services to a greater number of people across a wider geographic area than small businesses. They serve consumers across Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей the nation and across the world. Corporate products tend to cost less per unit sold. More­over, consumers benefit from the availability of corporate «brand names», which they recognize as guaranteeing a Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей certain level of quality wherever purchased.

Large corporations also have the financial strength to research, develop and produce new goods. Their scientific know-how, inno­vation and technical capability are critical to maintaining the Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей na­tion's competitiveness and productivity.

In the United States, a corporation is a specific legal form of organization of persons and resources chartered by one of the 50 states for the purpose of Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей conducting business. When people and resources are brought together, the result in the eyes of the law - is a person (Indeed, the Latin word «corpus» means «body» or « per Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей­son»). A US corporation, distinct from any individual human being, may own property, sue or be sued in the court and make con­tracts. For this reason, a corporation is an ideal vehicle for the Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей conduct of business by many smaller enterprises as well as larger ones.


^ Advantages and Disadvantages of Corporations

The corporate form of business is more flexible instrument for large-scale Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей economic activity than the sole proprietorship or part­nership.

First, because the corporation itself has legal standing, it safe­guards its owners, relieving them of individual legal responsibility when they act as Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей agents of the business.

Second, the owners of shares of stock have limited liability; they are not responsible for corporate debts. If a share-holder paid $ 100 for 10 shares of stock and the corporation Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей goes bankrupt, he or she can only lose $ 100 invested.

Third, corporate stock is transferable. Thus, the corporation is not damaged by the death or disinterest of a particular person. An owner Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей of stock can sell his or her holdings at any time or pass the stock along to heirs. Yet, the corporate business organization has drawbacks as well as benefits.

One disadvantage relates Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей to the taxation. As a separate legal entity, the corporate may pay taxes. Unlike the treatment of inter­est on bonds, dividends paid to shareholders are not a tax-deducti­ble business expense for the Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей corporation. When the corporation passes along profits to individuals in the form of dividends, the individuals are taxed again on these dividends. This is known as «double taxation».

Another cost results Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей from the fact that ownership becomes sepa­rated from management. While this makes management easier, some managers are tempted to act more in their own interests than of the stockholders.


Money

Money Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей is the heart of business. Money is needed to pay wages, to acquire materials to make up into manufactured goods and to reward those who attempt to anticipate the needs of Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей society and stand to lose if they fail to do so. Money is lubricant which allows the diverse elements in the economic system to interact effectively. If a business runs short of Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей money in the private sector it will be wound up (if a company) or closed down (if the proprietor is bank­rupted). People will lose their jobs and the flow of goods and/or Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей services it has been providing will dry up. Money is the life blood of business and executives of all types will find much of their time and energy devoted Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей to coping with problems of a financial nature. Fi­nance becomes critical when a business is being first set up; when expansion is planned or when a shortage of working capital is Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей de­veloped.

Without money business would be impossible. It is needed to pay wages, buy raw materials and to reward successful entrepre­neurs. If there is a shortage of money, the business will collapse Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей. There will be no production, no jobs. That is why the executors spend so much time dealing with financial problems.


^ Corporate Finance

Corporations need financing for the purchase of assets and Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей the payment of expenses. The corporations can issue shares in ex­change for money or property. Sometimes it is called as equity fund­ing. The holders of the shares form the ownership Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей of the company. Each share is represented by a stock certificate, which is negotia­ble. It means that one can buy and sell it. The value of a share is determined Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей by the net assets divided by the total number of shares outstanding. The value of the share depends on the success of the com­pany. The greater the success, the more value the shares Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей have.

A corporation can also get capital by borrowing. It is called debt funding. If a corporation borrows money, they give notes or bonds. They are also negotiable. But the Corporation - Методические указания тексты для самостоятельной работы для студентов фдо iкурса экономических специальностей interest has to be paid out whether business is profitable or not.


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