Corporations

Corporations

by Carey Reubeni Magardie

​WHAT ARE CORPORATIONS?

​Definition: A form of business operation that declares the business as a separate, legal entity guided by a group of officers known as the board of directors.

A corporate structure is perhaps the most advantageous way to start a business because the corporation exists as a separate entity..

​CORPORATION

• ​MUST BE REGISTERED AND OPERATE APART FROM ITS OWNERS

• ​TO RAISE MONEY OWNERS CAN SELL STOCK OR SHARES IN THE COMPANY

• ​THE COMPANY MUST HAVE A BOARD OF DIRECTORS WHO WILL GOVERN THE CORPORATION

Poll

MANY CORPORATIONS ARE BIG BUSINESSES THAT SELL STOCK ON THE STOCK EXCHANGE. WHY WOULD CORPORATIONS DO THIS?

• TO BECOME POPULAR

• TO RAISE MONEY

Open Ended

Name one reason you think corporations would sell stocks?

RESEARCH TASK

​IN YOUR NOTEBOOK

​RESEARCH AND FIND:

​

*4 ADVANTAGES OF A CORPORATION

​

​*4 DISADVANTAGES OF A CORPORATION

​ADVANTAGES OF A CORPORATION

​* LIMITED LIABILITY - HOLDS A FIRMS OWNERS ARE RESPONSIBLE FOR NO MORE THAN THE CAPITAL THEY HAVE INVESTED.

​* ABILITY TO RAISE MONEY THROUGH STOCK.

​*BUSINESS CONTINUITY- CORPORATION DOES NOT END IF AN OWNER DIES.

​*EASY TO TRANSFER OWNERSHIP - BY SELLING YOUR STOCK

​DISADVANTAGES OF A CORPORATION

​*CORPORATIONS ARE SUBJECTED TO DOUBLE TAXATION. THEY PAY TAXES ON THEIR INCOME AND STOCKHOLDERS PAY TAXES ON PROFITS.

​*THE GOVERNEMENT REGULATES CORPORATIONS MORE THAN ANY OTHER TYPE OF BUSINESS.

​*CORPORATIONS ARE DIFFICULT AND COSTLY TO START WITH A COMPLEX PROCESS. THEY MUST FOLLOW EXTENSIVE RULES AND STANDARDS.

​*CORPORATIONS MUST DECLARE PUBLIC REPORTS WHICH ARE AVAILABLE TO COMPETITORS.

Multiple Choice

A CORPORATION OPERATES AS A SEPERATE LEGAL ENTITY APART FROM ITS OWNERS.

• TRUE

• FALSE

Multiple Select

A DISADVANTAGE OF A CORPORATION IS

• LIMITED LIABILITY

• DOUBLE TAXATION

• ABILITY TO RAISE CAPITAL

• COSTLY TO START

Multiple Choice

IN ORDER TO EXPAND THE CORPORATION

• MUST SELL STOCK

• MUST SELL THE CORPORATION

Multiple Select

AN ADVANTAGE OF A CORPORATION IS

• BUSINESS CONTINUITY

• LIMITED LIABILITY

• GOVERNMENT REGULATION

• EXPENSE

Multiple Choice

GOVERNMENT REGULATES CORPORATIONS MORE THAN OTHER TYPES OF BUSINESS OWNERSHIPS?

• NO

• YES