- •The value of college education. (Threshold, Unit 2)
- •2. Money: history, functions, forms. (Overview, Unit 4)
- •3. Pricing policies. . (Threshold, Unit 3)
- •4. A Nation’s Economy. Economic indicators. (Overview, Unit 3: 3.1, 3.6)
- •5. Markets & Monopolies. (Overview, Unit 1)
- •6. International Trade: Export and Import. Investments. (Environment, 1.3)
- •7. Visible and Invisible Trade. (Environment, 1.3)
- •8. Invisible Trade: insurance: functions, classification. Lloyds Underwriters. (Environment, 1.3; l of b, Unit 23)
- •9. International Trade: Breaking into the new market. (Environment, 1.3; l of b, Unit 1,15)
- •10. A Nation’s Balance of Payments (Environment, 1.3).
- •11. Types of securities. (Environment, 2.6)
- •12. Trade restrictions: tariffs, subsidies, quotas and cartels. How trade restrictions affect international trade. (Environment, 1.6)
- •13. International Trade Organisations & Agreements. (Environment, 1.6)
- •14. Types of businesses. (Environment, 2.3)
- •16. A private company: Raising and granting loans. (Harper & Grant Ltd. Overcomes the risk of a take-over and ensures the favourable redistribution of the share capital). (l of b, Unit 13, 17, 21)
- •17. Auditing the accounts of a limited company. (l of b, Unit 19)
- •18. Mergers, takeovers & acquisitions. (Environment, 2.6)
- •19. Advantages and disadvantages of small businesses. (Environment, 2.5.3)
- •20. Advantages and disadvantages of corporations. (Environment, 2.3)
20. Advantages and disadvantages of corporations. (Environment, 2.3)
The majority of businesses are limited companies (US - corporations), in which investors are only liable for the amount of capital they have invested.
A corporation is a business, that although owned by one or more investors, legally has the rights and duties of an individual. Corporations have the right to buy, sell, and own property. Corporations may make legal contracts, hire and fire workers, set prices, and be sued, fined and taxed. A business must obtain a charter of incorporation from the state legislature to be legally recognized as a corporation.
Corporations have some advantages: 1) a corporation has limited liability, so if the corporation goes bankrupt, the stockholders lose only the value of their stock. The stockholders, who are the corporations owners, cannot be held personally responsible for any money the corporation owns. 2) corporations can raise very large amounts of money. 3) a corporation has an unlimited life. 4) ownership transfer is easy.
But corporations have some disadvantages: 1) complex forms must be filed with the state or federal government. A charter must then be issued, investors found, share sold, and manufacturing or sales begun. 2) a corporation's profits are subject to double taxation. A corporation must pay taxes on its profits before the distribution of profits as dividends to stockholders and after this distribution stockholders pay taxes on this income.
3) in corporations with many owners or stockholders the individual share of profits in the form of dividends is small.
4) a corporation's owners do not directly control the business.