1. Business Organizations

2. Section 3 – Corporations, Mergers, and Multinationals

3. Corporation- a legal entity owned by individual stockholders.

4. Stocks (shares) - represent a portion of ownership of a corporation.

5. Types of Corporations
Closely Held Corporation

6. 2) Publicly Held Corporation

7. Advantages of Incorporation
Advantages for the Stockholders
No responsibility for corporations actions
Stocks are transferable

8. Advantages for the Corporation
Has great potential for growth.
Bonds
Can hire the best available capital.
Corporations have long lives.

9. Disadvantages of Incorporation
Difficult and expensive to start up – must have certificate of incorporation
Loss of control
Double taxation
Must pay dividends
Heavily regulated

10. Corporate Combinations
Horizontal mergers
Vertical mergers
Conglomerate

12. Multinationals (MNCs)
Large corporations headquartered in one country that have subsidiaries throughout the world.

13. Multinational corporate structure:
Horizontally integrated multinational corporations

14. Vertically integrated multinational corporations

15. Diversified multinational corporations

16. Advantages of MNCs Offer products worldwide.
spread new technologies and production methods across the globe.

17. Disadvantages of MNCs Influence culture and politics
Critics are concerned about wages and working conditions