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Unformatted text preview: 1. CORPORATION- State-chartered legal entity with authority to act and have liability separate from its owners stockholders. Corporations can choose whether to offer ownership to outside investors or remain privately held. 2. The Advantages and Disadvantages Owning A Corporation: Advantages: 1. Limited liability- A major advantage of corporation is the limited liability to the owners. It means that the owners of a business are responsible for its losses only amount they invest in it. 2. Ability to raise more money for investment- To raise money, a corporation can sell shares of its stock to anyone who is interested. Millions of people can own part of a major company. If the company sells 10 million shares for $50 each, it will have 500 million available to build plants, buy materials, hire people, and etc. Corporation can borrow money by borrowing it from investors by issuing bonds, which are promised to repay the loan in the future with interest. Firms can also obtain loans financial intuitions. 3. Size- Corporations can raise large amount of money to work with, big corporations can build modern factories or software development facilities with the latest equipment. They can hire experts or spet in all areas of operation. They can buy other corporations in different fields to diversify their business risks.different fields to diversify their business risks....
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This note was uploaded on 11/27/2011 for the course BUSN 319 taught by Professor Amanda andres during the Spring '11 term at DeVry Long Beach.
- Spring '11
- Amanda Andres