Ch+8.3

Ch 8.3 notes and questions

__Corporations__ __Advantages of Incorporation__ __Disadvantages of incorporation__ __Corporate combinations__ __Multinational corporation__
 * corporation is a legal entity or being owned by individual stock holders, each of whom faces limited liability for the firms's debts
 * stock is a certificate of ownership in a corporation
 * closely held corporations are stocks that are passed down through the family
 * publicly held corporation has many share holders who can buy or sell stock on the open market
 * limited liability for owners
 * transferable ownership
 * ability to attract capital
 * long life
 * a bond is a formal contract to repay borrowed money with interest at fixed intervals
 * expenses and difficulty of start up
 * double taxation potential loss of control by the founders
 * certificate of incorporation or a corporate charter
 * dividends is the portion of corporate profits paid out of stockholders
 * horizontal mergers join 2 or more firms competing in the same market with the same good or service
 * vertical mergers join in 2 or more firms involved in different stages of producing the same good or service
 * conglomerates have more than 3 business that make unrelated products
 * MNC's are corporations that operate in more than one country at a time

questions #1-7
 * 1) because it is owned by individual stockholders
 * 2) closely held corporations are stocks that are held within the family and publicly held corporations are stocks that can be sold and bought on the market
 * 3) info required for a certificate of incorporation is the name, statement of purpose, founders names and address, HQ business address method of fund raising
 * 4) a stock is a certificate of ownership in a corporation
 * 5) stockholders must pay a dividend because they owe a special tax
 * 6) horizontal mergers join 2 or more firms competing in the same market with the same good or service and vertical mergers join in 2 or more firms involved in different stages of producing the same good or service
 * 7) business are Multinational corporation because there are more than one country