1. BLU #6
Corporations

2. Incorporated “INC.” Make or lose $, be sued, pay taxes
Corporation – legal entity separate from ppl who run it
Make or lose $, be sued, pay taxes
Major companies, insurances co, grocery stores
19% of businesses are corp, but make 87% of profit

3. Articles of Incorporation
Application to become a corp.
Granted a charter to act as a corp

4. Structure Owners or Shareholders (stockowners) elect ….
Board of Directors: ppl from w/in and outside of company who make major decisions and hire ….
Corporate Officers: Vice Presidents who hire….
Department Heads
Employees

5. ADV.
Easier to raise financial capital: sell shares of stock: ownership in company
Limited Liability: Stockholders can’t lose assets, stockholders can only lose the amount they invested (no more)

6. Stock

7. More Adv Unlimited life: company goes on w/ or w/o owners
Specialized management: hire ppl w/skills

8. Disadv. Difficult and costly to start
More regulated b/c must answer to shareholders, SEC (Securities & Exchange Commission regulates)
Owners have less control
Double taxation: corp pays taxes AND stockholders pay personal income tax on any profit

9. Non Profit Organizations
Org’s involved w/charity, education, cultural activities
NOT trying to make a profit!
Often tax exempt (free)
EX: Red Cross, museums, private schools, etc

10. Out of the 3 types of business ownership (SP, partner, corp), which one would you prefer. Why?