商学导论Chapter(3)

Creation of a corporation (as in the U.S.)
1. Prospectus ↓
2. Articles of incorporation ↓
3. Corporate charter granted ↓
4. Board of directors elected
Management of Corporations
Understand the nature of a corporation and its advantages and disadvantages. Describe how a corporation is created and managed. Understand how the form of organization affects (1) taxes, (2) the distribution of profits, (3) the ownership and control of a business, and (4) the liabilities of business owners.
corporation (corp.) company (Co., Ltd.) dotcom company firm venture (Sino-foreign joint venture) group business (start-up business)
What is a corporation?
Select a corporation and tell people its major features.
Discussion topic
Would you like to work in a sole proprietorship, a partnership, or a corporation? Give your reasons.
A Basic Business Reader
Chapter 3
Forms of Business Ownership (2)
rivision
sole proprietorship partnership
corporation cooperation
Objectives
After studying this chapter you will be able to:
- Owners receive a fixed dividend before common stockholders receive any dividends.
- Owners usually do not have the right to vote on the company’s board of directors.
Private and public corporations
A private corporation is one that has only a few shareholders.
Private corporations do not have to:
- produce financial reports to the public; - go through complex procedures to make decisions; - hold public stockholder meetings.
Advantages of a corporation
• Limited liability; • Ease of transferring ownership; • Continuous life; • Ease of attracting capital; • Large size.
Disadvantages of a corporation
- Owners are entitled to receive dividend payments.
Common stock and preferred stock
Preferred stock
- Owners get preference in the distribution of the company’s earnings.
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White House
body
entity organization institution institute bureau (Federal Bureau of Investigation) agency (Central Intelligence Agency) association (China Football Association) society
• Government regulations; • Higher taxes; • Lack of personal interest; • Lack of secrecy; • Rigid structure; • Difficulty in creating.
Workshop
Presentation work
Private and public corporations
A public corporation is one that issues certificates of ownership or shares of common stock that may be traded on stock exchanges.
with other legal bodies; - to sue or be sued in its own name.
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Public corporations have to:
- produce financial reports to the public; - go through complex procedures to make
decisions; - hold public stockholder meetings.
A corporation is a legal body created by the state. As a legal body, it is able:
- to buy, own, and transfer property; - to enter into contracts with individuals or
Board of directors: to ensure that the
objectives of the corporation are achieved on schedule.
Corporate officers: responsible to the board of
directors for the management and daily operations of the firm.
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Common stock vs. preferred stock
Common stock
- Anyone can buy and sell shares of common stock.
- Owners have a right to vote on the company’s board of director.