CORPORATION, MERGERS AND MULTINATIONALS

Prepared by: Qokipops

CORPORATION

is a legal entity, or being, owned by individual stockholders,

each of whom faces limited liability for the firms debts.

Stockholder own stock, also called shares, which represent

their portion of ownership in the corporation.

the most complex form of business organizations.

STOCK - a share representing a portion of ownership in a

corporation.

TYPES

OF

CORPORATION

TYPES OF CORPORATION

Closely held Corporation

Corporation issue stock to only a few people,

often family members. These stockholders rarely

trade their stock, but pass it on within families.

-- also known as privately held corporation.

Publicly held Corporation

many shareholders who can buy or sell stock on

the open market.

CORPORATE

COMBINATION

Corporate combination

- As a corporation continues to grow

managers and owners may decide it make

sense to merge or, combine, the firm with

another company or companies.

3 kinds of Mergers

Horizontal Mergers

- join two or more firms competing in the same

market with the good or service.

Vertical Mergers

- join two or more firms involved in different stages

of producing the good or service.

- can allow a firm to operate more efficiently.

3 kinds of mergers

- combined firms can control all phases of

production, rather than rely on the goods or

services of outside suppliers.

Conglomerates

- firms buy other companies that produce totally

unrelated good or services.

- have more than three business that make

unrelated products.

MULTINATIONAL

CORPORATIONS

(MNCs)

Multinational Corporation(MNCS)

- It is the world's largest corporations

produce and sell their goods and services

througout the world.

Advantages & Disadvantages of

corporation

Advantages

- corporation is a stand-alone entity.

- separates tax liabilities.

Disadvantages

- Forming a corporation requires more time and money than forming other

business structures.

- Governmental agencies monitor corporations, which may result in added

paperwork.

- Corporate profits may be subject to higher overall taxes

Advantages & Disadvantages of

MNC's

Advantages - Multinational products and services provide the best possible

standard.

- MNC's plays a big role in creating employment in the foreign

countries.

- Growth of MNC's in those country will increase level of industrial

and economic development.

Disadvantages - MNCs take their profits out of the host countries in Dollars that

causes a reduction in foreign reserves for host countries

- MNCs increase the dependence of the host country on their parent

countries that may affect the foreign policy of host countries.