Bell Ringer – 3/10/08 1. What is a corporation? 2. Why do big businesses, such as a corporation, require a structure of employment positions? 3. How are.

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Bell Ringer – 3/10/08 1. What is a corporation? 2. Why do big businesses, such as a corporation, require a structure of employment positions? 3. How are stock and shares related?

Corporate Bond Corp. Bond – a certificate issued by a corporation in exchange for money borrowed from an investor Bondholder owns no part of company, company is in debt to bondholder Bondholder is repaid the principal (actual amount of $ borrowed) + interest (extra percent of loan paid by company)

Advantages of Corporations For Stockholders Limited liability (can’t lose more $$ than invested) Flexibility (shares can be sold) For Corporations Limited liability (investors’ $$) Owners not involved in daily operations; specialists for each task Longevity

Disadvantages of Corporations Corporate charter can be expensive and difficult (attorney an state fees several thousand dollars) Tough government regulation Slow process of decision making – manager debates, extensive study of issues by specialists Heavy taxes

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