Types of Business Corporations

“Private”

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Business corporations may be public corporation, which obtains funds by selling ownership shares, called capital stock, to large numbers of investors. A public limited company must put the letters PLC after its name. A PLC has at least two members but not maximum since it can offer its shares for sale to the public and may, therefore, have hundreds of thousands of shareholders, who have one vote for each share they own. Shareholders cannot sell their shares back to the company but they can sell their shares to the people who wish to buy on the Stock Exchange. The price of shares will go up if the PLC is making good profits and will go down if it is not doing so well. The stock in most large corporations is widely distributed, but a person who succeeds in buying 51 per cent of the shares can gain control of a PLC.

Private limited companies, unlike public corporations, have a limited number of owners – at least two, but usually not more than fifty members, who provide the capital which is divided into shares. Some private corporations are large firms. But most are small companies in which all or most stock is held by family members. Shares can be transferred only by the agreement of other shareholders and cannot be offered for sale to the general public. A private limited company has limited liability and this is indicated by the letters LTD after its name.

The business corporation is not the only type of corporation that exists. Educational, religious, and charitable institutions are also permitted to incorporate. Usually this type of corporation does not issue stock and it is a nonprofit institution. If there is a profit, it is generally reinvested in the institution rather than distributed to private stockholders. Nonprofit corporations, such as the Red Cross, provide community services. They consist of members instead of stockholders and provide no dividends.

In addition, there are governmental corporations, which may be established by cities, states, the federal government and special agencies. Some examples of these governmental corporations are state universities, state hospitals, and city owned utilities. They provide certain public welfare functions. Governmental corporations are always nonprofit and usually do not issue stock certificates.

Do you know these words?

business corporation	корпорация, занятая в производстве или торговле
public corporation (PLC)	открытая акционерная компания
private corporation (LTD)	частная корпорация
ownership share	акция, доля, часть собственности
capital stock	акционерный капитал
limited	с ограниченной ответственностью (об акционерных обществах)
stock exchange	фондовая биржа
to transfer	передавать
charitable	благотворительный
to issue	выпускать
to incorporate	зд. придавать статус акционерного общества
utility	коммунальные предприятия, службы
public welfare	общественное благосостояние