Corporations

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A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a stock certificate is called a stock-holder.

There are several advantages of the corporate form of ownership. The first is the ability to attract financial resources. The next advantage is that the corporation attracts a large amount of capital. It can invest it in plans, equipment and research. And the third advantage is that a corporation can offer higher salaries and thus attract talented managers and specialists.

The privately owned business corporation is one type of corporation. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such corporations do not issue stock and are nonprofit. If there is a profit it is reinvested in the institution rather than distributed to private to stockholders.

In some western countries, cities, states federal government and special agencies can establish governmental corporations. A few examples of these governmental corporations are state universities, state hospitals and city owned utilities. Governmental corporations are nonprofit as a rule and usually they do not issue stock certificates.

Active Vocabulary

corporation корпорация

to establish учреждать

stock certificate акция

stockholder(shareholder) акционер, держатель акций

to attract financial resources привлекать финансовые ресурсы

to offer high salaries предлагать высокие зарплаты

to attract a large amount of привлекать большой капитал

capital

educational, religious, образовательные, религиозные, благо-

charitable institutions творительные учреждения

to issue stock выпускать акции

nonprofit неприбыльный

to reinvest вкладывать еще раз

Comprehension Questions

1. Who can own a corporation?

2. Is a corporation necessarily larger than a sole proprietorship?

3. What are the advantages of the corporate form of ownership?

4. What can you say about the advantages of the corporate form of ownership?

5. Do the corporations issue stock to stockholder?

6. What kind of corporations usually doesn’t issue the stock?

7. What world-known corporations do you know?

8. What types of business usually take the corporate form of ownership?

Vocabulary Practice

Exercise 1. Choose the necessary word and put it in the sentence.

1. What kind of ... is better: buying stock |

or buying real estate? |1 charitable

2. To attract greater financial ... the |

company issues the stock. |2 stock

3. A university can be ... corporation. |3 resources

4. The partners didn't put the same ... |

into business. |4 institution

5. The group of people from different countries |

are going to ... a corporation. |5 investment

6. The Red Cross is an international ... |

organization. |6 nonprofit

7. I want to buy some ... in IBM and |7 amount of

General Motors. |capital

8. An educational ... usually reinvests all |

its money. |8 to establish