Large Corporations in the usa

Although there are many small and medium-size corporations, bigger business units are needed to perform certain services in the vast economy. Large corporations can supply goods and services to a greater number of people across a wider geographic area than small businesses. They serve consumers across the nation and across the world. Corporate products tend to cost less per unit sold. More­over, consumers benefit from the availability of corporate «brand names», which they recognize as guaranteeing a certain level of quality wherever purchased.

Large corporations also have the financial strength to research, develop and produce new goods. Their scientific know-how, inno­vation and technical capability are critical to maintaining the na­tion's competitiveness and productivity.

In the United States, a corporation is a specific legal form of organization of persons and resources chartered by one of the 50 states for the purpose of conducting business. When people and resources are brought together, the result in the eyes of the law - is a person (Indeed, the Latin word «corpus» means «body» or « per­son»). A US corporation, distinct from any individual human being, may own property, sue or be sued in the court and make con­tracts. For this reason, a corporation is an ideal vehicle for the conduct of business by many smaller enterprises as well as larger ones.

Advantages and Disadvantages of Corporations

The corporate form of business is more flexible instrument for large-scale economic activity than the sole proprietorship or part­nership.

First, because the corporation itself has legal standing, it safe­guards its owners, relieving them of individual legal responsibility when they act as agents of the business.

Second, the owners of shares of stock have limited liability; they are not responsible for corporate debts. If a share-holder paid $ 100 for 10 shares of stock and the corporation goes bankrupt, he or she can only lose $ 100 invested.

Third, corporate stock is transferable. Thus, the corporation is not damaged by the death or disinterest of a particular person. An owner of stock can sell his or her holdings at any time or pass the stock along to heirs. Yet, the corporate business organization has drawbacks as well as benefits.

One disadvantage relates to the taxation. As a separate legal entity, the corporate may pay taxes. Unlike the treatment of inter­est on bonds, dividends paid to shareholders are not a tax-deducti­ble business expense for the corporation. When the corporation passes along profits to individuals in the form of dividends, the individuals are taxed again on these dividends. This is known as «double taxation».

Another cost results from the fact that ownership becomes sepa­rated from management. While this makes management easier, some managers are tempted to act more in their own interests than of the stockholders.

Money

Money is the heart of business. Money is needed to pay wages, to acquire materials to make up into manufactured goods and to reward those who attempt to anticipate the needs of society and stand to lose if they fail to do so. Money is lubricant which allows the diverse elements in the economic system to interact effectively. If a business runs short of money in the private sector it will be wound up (if a company) or closed down (if the proprietor is bank­rupted). People will lose their jobs and the flow of goods and/or services it has been providing will dry up. Money is the life blood of business and executives of all types will find much of their time and energy devoted to coping with problems of a financial nature. Fi­nance becomes critical when a business is being first set up; when expansion is planned or when a shortage of working capital is de­veloped.

Without money business would be impossible. It is needed to pay wages, buy raw materials and to reward successful entrepre­neurs. If there is a shortage of money, the business will collapse. There will be no production, no jobs. That is why the executors spend so much time dealing with financial problems.