Corporations Stocks essay example

916 words
A sole proprietorship is a business that is owned and usually operated by one person. Sole proprietorship is the simplest for m of business and the easiest to start. Sole proprietorships have disadvantages. One disadvantage, for example unlimited liability which id a legal concept that holds a business owner personally responsible for all the debts of the business. The U.S. Uniform Partnership act defines a partnership as voluntary association of two or more persons to act as co owners of a business for profit. All partners are not necessarily equal.

Some may be active in running the business while other may have a limited role. There are types of partners. A general partner is a person who assumes full or shared responsibility operating a business. A general partnership is a business co-owned by to or more general partners who are liable for everything the business does. A limited partner is a person who contributes capital to a business but who has management responsibility or liability for losses beyond his or her investment in the partnership. Limited partnership is a business co-owned by to or more general partners who manage the business and the limited partner who invest money in it.

A master limited partnership is a business partnership that is owned and managed like corporation but taxed like a partnership. An example is a NBA basketball team (Boston Celtics). A corporation is an artificial person created by law, with most of the rights of a legal person, including the right to start and operate a business, to own property and to enter into contracts. The shares of ownership of a corporation is called stock, and the people who own a corporate stock are called stockholders or shareholders. A closed corporation is a corporation whose stock is owned by relatively few people and is not to the general public. A open corporation is a corporation whose stock is bought and sold on security exchanges and can be purchased by any individual.

An example would be general motors. The forming a corporation is called incorporation. Incorporating a business does not guarantee success. An incorporated business is called a domestic corporation in the state it is incorporated. In all other states where it does business it is a foreign corporation. A corporate charter is a contract between the corporation and the state.

The charter includes: . Firms name and address. Incorporator's name and address. Purpose of the corporation. Maximum amount of stock and types of stocks issued.

Rights and privileges of stockholders. Length of time corporation is to exist There are two types of stocks. Common stocks is stock owned by individuals or firms who may vote on corporate matters, but whose claims on profit and assets are subordinate to the claims of others. Preferred stock is stock owned by individuals or firms who usually do not have voting rights, but whose claims on dividends are paid before those of common stock owners. A dividend is a distribution or earnings to the stockholders of a corporation.

A proxy is a legal form listing issues to be decided by stockholders meetings and enabling stockholders to transfer their voting rights to some other individual or individuals. The board of directors is the top governing body of a corporation, the members of which are elected by the stockholders. Corporate officers are appointed by the board of directors. S-corporations is a corporation that is taxed as though it were a partnership. Limited liability is a feature of corporate ownership that limits each owners financial liability to the amount of money she or he has paid for the corporations stocks.

A limited liability company is a form of business ownership that provides limited liability and taxed like a partnership. A government owned corporation is a corporation owned and operated by local, state and federal government. A Quasi-government corporation is a business owned partly by the government and partly by private citizens or firms. A non-for-profit corporation is a corporation organized to provide a social, educational, religious, or other services rather than own a profit. Cooperative is an association of individuals or firms whose purpose is to perform some business function for its members.

A joint venture is agreement between two or more groups to form a business entity in order to achieve a specific goal or to operate for a specific period of time. A syndicate is a temporary association of individuals or firms organized to perform a specific tasks that requires a large amount of capital. A merger is the purchase of one corporation by another. A hostile takeover is a situation in which management and the board of directors of the firm targeted for acquisition disapprove of the merger. Tender offer is an offer to purchase the stock of a firm targeted for acquisition at a price just high enough to tempt stockholders to sell their shares. A proxy fight is a technique used to gather enough stockholder votes to control the target company.

A di vesture is the process of dismantling a company and selling of different parts. Leveraged buyout is a purchase arrangement that allows a firm's managers and employees or a group of investors to purchase the company.