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Corporation: business owned by stockholders These shareholders have limited liability for the companys debts and losses They acquire ownership through.

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Presentation on theme: "Corporation: business owned by stockholders These shareholders have limited liability for the companys debts and losses They acquire ownership through."— Presentation transcript:

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2 Corporation: business owned by stockholders These shareholders have limited liability for the companys debts and losses They acquire ownership through the purchase of stockshares of ownership in the corporation

3 If a company does well and earns a profit, stockholders may receive dividendspart of the profit paid to stockholders

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5 Corporations make up 20% of all businesses in the U.S. Public corporation: a corporation that issues stock that can be freely bought and sold

6 Private corporation: corporation that retains control over who can buy and sell the stock

7 Access to resources: Easy to raise money through the sale of stocks and bonds Bonds: a contract issued by a corporation that promises to repay borrowed money plus interest, on a fixed schedule

8 Professional managers: CEOs, etc. are in charge of the corporation Limited liability for debts/losses

9 Unlimited life: they continue to exist even after a change in ownership

10 Start-up cost and effort: expensive and lots of paperwork Heavy regulations: stockholders meetings and annual reports

11 Double taxation: must pay taxes on profits and on dividendsthe corporate profits paid to stockholders Loss of control: some control may be lost to the board of directors

12 Horizontal merger: when 2 companies that produce the same product merge Example: car companies

13 Vertical merger: when 2 companies involved in different steps of marketing/producing a specific product merge

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15 Conglomerate: the merger of companies that produce unrelated products

16 Multinational corporation: a large corporation with branches in several countries Example: General Electric

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19 Franchise: business made up of semi-independent businesses that offer the same products or services Example: McDonalds

20 Proven/well-known product Training in how to run the business is given Franchiser pays for advertising

21 Start-up costs Sharing profits with franchiser Must follow franchisers rules

22 Cooperative: business operated for the shared benefit of its owner, who are also its customers Examples: credit unions, producers co-ops, etc.

23 Nonprofit organization: institution that acts like a business organization but its purpose is to benefit society not to make a profit Example: Habitat for Humanity

24 1. What are the benefits of forming a conglomerate?

25 2. In what ways might a vertical merger in the oil industry influence gas prices?

26 3. What would be the outcome of raising the fees and requiring more paperwork in order to start a corporation?

27 4. How is a franchise an almost independent business?


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