the privately owned business corporation is an institution established for the purpose of making a profit. It is operated by individuals whose shares of ownership are represented by stock certificates. Persons owning stock certificates are called stockholder.
the corporate form of ownership has several advantages. The first is its ability to attract financial resources. The second advantage is that if the corporation attracts a large amount of capital, it can make large investments in plants, equipment and research. The third advantage is that a corporation cac offer high salaries and thus attract talented managers.
The privately owned business corporation is not the only type of corporation that exits. Educational,religious and charitable institutions are also permitted to incorporate. Usually this type of corporation does not issue stock and is a nonprofit institution. If there is a profit, it is generally reinvested in the institution rather than distributed to private stockholders.
in addition, there are governmental corporations in the United States which may be established by cities, states, the federal government and special agencies. some examples of these governmental corporations and state universities, state hospitals and city-ownes utilities. Governmental corporations are always nonprofit and usually do not issue stock certificates.
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