Text 3 Corporations

A corporation is a formal structure, operating under state law, with a name and functions specified by its charter.

In spite of the fact that corporations account for less than 15 percent of American businesses, the corporate form of ownership is the most important type of business ownership in terms of sales, size, and number of workers.

Corporations may be classified according to ownership (public, private, or quasi-public) or location of operation (domestic or foreign).

A public corporation is formed by the government to carry on activities that are in the public interest.

A private corporation is organized by private citizens and licensed by a state to carry out work in a specific business. While most private corporations are expected to return profits to their owners, non-profit corporations may be formed to fulfill charitable or educational needs.

A quasi-public corporation is a privately owned company that is extensively regulated because of the vital public nature of the services it provides.

The liability of a corporation’s stockholders is limited to the amount of capital they have invested in the company. The net profits of a corporation are subject to “double taxation” – the corporation pays taxes on its net profits, and stockholders pay taxes on any dividends received.

The corporation is the most heavily regulated of all forms of business ownership. The charter serves as a contract between the corporation and the state that specifies how the business will be run. The bylaws are the rules and regulations that govern the internal affairs of the company.

Among the advantages of corporations are limited liability, permanence, the ability to transfer ownership and attract funds and skilled managers.

There are also some disadvantages in the corporate form of ownership.

– Forming a corporation is a long and expensive process.

– Decision making is slow.

– It has double taxation of profits and many government restrictions.

6. Ответьте на вопросы:

1) What is a corporation?

2) The corporation is the most important type of business ownership, isn’t it?

3) How are corporations classified?

4) How is the corporation regulated?

5) Are there any disadvantages in the corporate form of ownership?

7. Дайте на английском языке развернутое определение понятиям:

a public corporation –

a private corporation –

a quasi-public corporation –

double taxation –

8. Закончите предложения, произведя нужный выбор:

1) Most private corporations	a) pay taxes on any dividends received.
2) Non-profit corporations	b) are expected to return profits to the owners.
3) Stockholders	c) may be formed to fulfill charitable needs.

9. a) Вы купили акции и стали акционером известной компании (укажите название). Обоснуйте свое решение на английском языке.

b) Вы отказались от первоначального решения создать корпорацию на основе вашего предприятия. Объясните причины вашего поступка на английском языке.