Disadvantages of a Corporation

• A corporation is difficult and expensive to create and organize. This process requires higher start-up capital and the services of a lawyer to obtain a government charter.

• Corporation is subject to double taxation. As a legal entity it pays a corporate income tax. Then, if the corporation distributes some of its net income to the stockholders as dividends, they are taxed again on the stockholders’ individual income tax returns.

The shareholders do not directly manage the corporation's daily operations. Instead, the shareholders meet at a corporation’s annual meeting to elect a board of directors whose job is to make general business decisions. Their decisions are then implemented by the corporation's officers, who are appointed by the directors.

12. The economy of the United States of America

The US economy is immense. In total, the annual value of all goods and services produced in the United States, known as the gross domestic product (GDP), was estimated to be nearly $14.7 trillion in 2010, approximately a quarter of nominal global GDP. Though the 2008-2010 financial crisis has had wide-ranging and long-term consequences1 for the world and US economies, the U.S. economy maintains a very high level of output per capita. In 2010, it was estimated to have a per capita GDP of $46,844, the 7th highest in the world. The country remains the world's largest manufacturer, representing a fifth of the global manufacturing output. Over 80 percent of the goods and services purchased by US consumers each year are made in the United States, the rest is imported from other nations. The United States is home to 139 of the world's 500 largest companies, which is almost twice that of any other country. The United States has a mixed economy that has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment. It is a dynamic, free-market system that is constantly developing the choices and decisions made by millions of citizens who play multiple roles as consumers, producers, investors and voters. It is individual producers and consumers who determine the kinds of goods and services produced and the prices of those products. But though a great majority of productive resources are privately owned, the federal government does play an important part in the national economy. It provides services and goods that the market cannot provide effectively, such as national defense, public goods and services2, assistance programs for low-income families, and interstate highways and airports. The government also provides incentives to encourage the production and consumption of certain types of products, and discourage the production and consumption of others, establishes guidelines regulating environmental protection.

The United States is the largest trading nation in the world, exporting and importing more goods and services than any other country. The international trade and the policies that encourage or restrict the growth of imports and exports have a wide-ranging effect on the US economy. It increases the total level of production and consumption in the world, lowers the cost of production and prices, that consumers pay, and increases the living standard. The total value of US imports and exports has amounted to 25 percent of the country's GDP.

The US economy produces many different goods and services. We can see it more easily dividing economic activities into four sectors that produce different kinds of goods and services. The first sector provides goods that come directly from natural resources: agriculture, forestry, fishing, and mining. The second sector includes manufacturing and the generation of electricity. The third sector, made up of commerce and services, is now the largest part of the US economy. It comprises financial services, wholesaling and retailing, government services, transportation, entertainment3, tourism, and other businesses that provide a wide variety of services to individuals and businesses. The fourth major economic sector deals with recording, processing, and transmission4 of information, and includes the communication industry5.

Manufacturing and Energy Scctors. The United States leads all nations in the value of its yearly manufacturing output. Manufacturing employs about one- sixth of nation's workers and accounts for 17 percent of annual gross domestic product. Although manufacturing remains a key component of the US economy, it has decreased in relative importance. From 1957 to 1995 the number of employees in manufacturing industry declined slightly while the total labor force grew.

The leading categories of the US manufactured goods are chemicals, industrial machinejy, electronic equipment, processed foods, and transportation equipment. Transportation equipment includes passenger cars, trucks, air planes, space vehicles, ships and boats, and railroad equipment, and various kinds of construction machinery, refrigeration equipment and computers. Factories in the United States build millions of computers, and the country occupies second place in the world in the production of electronic components and exercises the world leadership in the development and production of computer software.

The manufacture of metal is concentrated in the nation’s industrial core region. Iron ore from the Lake Superior district, plus that imported from Canada and other countries and Appalachian coal are the basis for a large iron and steel industry. Different branches of industry such as textile, clothing, leather goods, food processing, precision instruments, lumber, furniture, tobacco and many other are highly developed too.

The energy to power the nation's economy1 - providing fuels for its vehicles and electricity for its machinery and appliances - is derived primarily from petroleum, natural gas, and coal. Petroleum provides 39 percent and coal - 22 percent of the total energy consumed in the USA.

Service and Commerce Sector. By far2 the largest sector of the economy in terms of output and employment is the service and commerce sector. This sector grew rapidly during the last part of the 20^th century and now it employs 75 percent of the US workforce. The growth of the sector has resulted in creating many new jobs in financing, banking, education and health services requiring advanced education. There are also low-paid positions that require less educational background3. They are store clerks, carriers, fast-food restaurant workers and others.

Transportation-related businesses are an important part of the service industry. Trucks, railroads, and ships transport goods to the markets across the country. Commercial airlines, railroads, bus companies, and taxis move tourists and commuters4 to their destinations. The US transportation network spreads into all sections of the country, but the network of railroads and highways is much denser in the eastern half of the United States, where it serves the nation's largest urban, industrial, and population concentrations. Large and small airports across the nation have formed a network providing air transportation to individual travelers. The nation has more than 5 thousand public and more than 13 thousand private airports.

One of the largest service industries in the Uni ted States is travel and tourism. In recent decades, visitors from overseas have become an increasingly important part of the US tourism business. Domestic and foreign travelers visit theme parks5, natural wonders, and points of interest in major cities. Tourism is mainstay of the economies of California, Florida and Hawaii.

The entertainment business plays a vital part in the nation's life. Motion picture production1’ has been centered in Hollywood, California, since the early decades of the 20th century. Other entertainment industries include theatre, which tends to be located in larger urban areas, particularly in New York City, (ever since the 1890s Broadway has reigned as the “Great White Way”, the major theatrical centre of the country); television, with major networks operating out of the New York City area. Atlanta is the hometown of the most famous TV-company CNN (Cable News Network). CNN is a 24-hour news

it station launched on cable television in 1980. It reaches over 75 million homes in 150 countries.

Information and Technology Sector. By the end of the 20th century many technological innovations had been introduced in the United States. One of the most far-reaching technological advances7 of the late 20th century took place in the field of computer science. The development of the personal computer allowed many individuals to own computers as well as small businesses to use computer technologies in their operations.

The Internet began in the 1960s as a small network of academic and government computers primarily involved in research for the US military. Beginning with a few researches at a handful of universities and government facilities8, the

Internet quickly became a worldwide network providing users with information on a range of subjects and allowing them to pay bills, order airline tickets, purchase goods via computer over the Internet.

The communication systems in the United States are among the most developed in the world. Television, newspapers, and other publications, provide most of the country's news and entertainment. On the average there are two radios and one television for every person in the United States. Although the economic output of the communications industry is relatively small, the industry has enormous importance to the political, social, and intellectual activity of the nation. Most communication media in the USA are privately owned and operate independently of government control.

A Natural Resource Sector. The United States, more than most countries, enjoys a wide variety1 of natural resources.

The United States has substantial mineral deposits within its borders. It leads the world in the production of phosphate, an important ingredient in fertilizers, and ranks second in gold, silver, iron ore, copper, lead, zinc, natural gas, and coal. The United States has huge fields of natural gas and oil. Petroleum production is third in the world, after Russia and Saudi Arabia. Although mining accounts for only a small share of the nation’s economic output, it was historically essential to US industrial development and remains important today. Coal and iron ore are the basis for the steel industry, which fabricates components for manufactured items such as automobiles, appliances, machinery, and other basic products. Petroleum is refined into gasoline, heating oil, and the petrochemicals used to make plastics, paint, pharmaceuticals, and synthetic fibers.

Agricultural output in the United States has historically been among the highest in the world. Despite its vast output, the US economy is so large and diversified that agriculture accounted for only 2 percent of annual GDP and employed only 3 percent of the workforce. Even though the number of farms has been declining for the last decades, overall production has increased because of more efficient operations. Bigger farms, operated as large businesses, have increasingly replaced small family farms. By applying mechanization, technology, efficient business practices2, and scientific advances in agricultural methods, larger farms produce great quantities of agricultural output using small amounts of labor and land.

The United States has some of the best cropland in the world. Cultivated farmland constitutes 19 percent of the land area of the country and makes the United States the world's richest agricultural nation. In part because of the nation's favourable climate, soil, and water conditions, farmers produce huge quantities of agricultural commodities and a variety of crops and livestock.

The United States is the largest producer of com, soybeans, and sorghum, and it ranks second in the production of wheat, oats, citrus fruits and tobacco. The United States is also a major producer of sugar cane, potatoes, peanuts, and sugar beets. It ranks fourth in the world in cattle production and second in hogs. Farmers in the United States not only produce enough food to feed the nation’s population, they also export more farm products than any other nation.

Cattle production, hog production, and chicken production are widespread throughout the United States. Vegetables are grown widely in the United States. Outside major US cities, small farms and gardens, known as truck farms3, grow vegetables and some varieties of fruits for urban markets. Most fruits grown in the United States are apples, pears, plums and citrus fruits - lemons, oranges, and grapefruits.

Forestry accounts for less than 0.5 percent of the nation's gross domestic product. Nevertheless, forests represent an essential resource for US industry. Forest resources are used in producing housing, fuel, foodstuffs, and manufactured goods.

The United States leads the world in lumber production and is second in the production of wood for pulp and paper manufacture. Since these high production levels, however, do not satisfy all of the US demand for forest products, the United States has to import lumber, most of which comes from Canada.

Rich fishing grounds of the country provide a rich marine harvest, the commercial value of which is about evenly divided4 between fish and shellfish. Americans consume approximately 80 percent of the catch as food. The remaining 20 percent goes into the manufacturing of products such as fish oil, fertilizers, and animal food.