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Unit 2

Section 2

Corporations,
Mergers and
Multinationals
CORPORATIONS
Most complicated for of business structure
• Corporations
• A legal entity, or being owned by individual stockholders each of whom
has limited liability for the firms debt.
• Owned by individual stockholders
• They have limited liability
• They buy stocks
• Stocks
• a document that shows they have paid money to be a part-owner of
the corporation.
• It is a legal entity (by an individual)
CORPORATIONS
It’s a legal identity
 It can make contracts
 It can sue
 It can be sued
 It pays its own taxes
 It can make donations to political causes

1. Kasky v Nike, Inc.. –Free Speech


2. Burwell v Hobby Lobby Stores Inc.- ACA and Birth
Control
3. Citizens United vs. Federal Election Commission
CORPORATE STRUCTURE
CORPORATE STRUCTURE

Stockholders invest money into the company. (part owners)


They get:
1. Dividends (money)
2. A vote for Board of Directors members
CORPORATE STRUCTURE

The Board of Directors selects the President also known as CEO (Chief
Executive Officer) to run the business
CORPORATE STRUCTURE
The CEO selects corporate officers to help administer
the company.
They usually are
• Chief Operating Officer (COO) – day to day operations
• Chief Financial Officer (CFO) – financial matters
• Secretary – paperwork
CORPORATE STRUCTURE
The Corporate Officers oversee the workforce which does the
everyday labor.
CORPORATE STRUCTURE
CHECKING FOR UNDERSTANDING
1. What is a corporation?
2. What is stock?
3. What do stockholders do?
4. What is the official name for the President of a
Corporation?
TYPES OF CORPORATIONS
Closely held
 All or almost all stocks are sold to family members
 Family members pass stocks to other family members
 Keeps it out of other people’s hands

Publicly held
 Open to the public to buy and sell stock
 Stock is sold on a “stock market” or “stock exchange”
CORPORATE ADVANTAGES
Investors
 Limited liability
Investors (stockholders) can only lose amount of
money they put into the company
Lawsuits paid by corporate funds, not invested funds
 Flexibility
Easy to transfer stocks
CORPORATE ADVANTAGES
To the Company
 Opportunity to grow
Sell stocks
Sell bonds
Bonds are IOUs
No ownership involved
 Has the funds to hire the BEST
 Long life
DISADVANTAGES
Difficult to start up
 A LOT of paperwork
Double Taxation
 Corporate profits are taxed
 Investor dividends are taxed
 Capital gains from sales of stock are taxed
Original owners lose some degree of control
A LOT of government regulations
CHECKING FOR UNDERSTANDING
1. What is the difference between a closely held and a
publicly held corporation?
2. What are some of the advantages that companies get
when they become corporations?
3. What are some of the advantages for investors when
they invest in corporations?
4. What are some disadvantages to forming a
corporation?
CORPORATE
COMBINATIONS
Mergers
A combination of two companies into one.

 Horizontal Merger
Combine with another company
Both companies
supply the same
good or service
CORPORATE
COMBINATIONS
Mergers

Vertical Merger .
Combine with .
another company .
The companies deliver
different parts which
work together to .
deliver a final good
CORPORATE COMBINATIONS
Conglomerates
 Two or more companies join together
 The products the companies make are
completely unrelated
CORPORATIONS
Multinational Corporations
 Companies (corporations) which exist in
 Many (multi) different
 Countries (national)
CHECKING FOR UNDERSTANDING
1. What is the difference between a horizontal and
vertical merger?
2. What is a conglomerate?
3. What is a multinational corporation.
CORPORATIONS AND HOW THEY CONTRIBUTE
TO E-WASTE

• Electronic Waste (E-Waste)


• Electronic Waste or E-Waste may be defined as discarded
computers, office electronic equipment, entertainment
device electronics, mobile phones, television sets, and
refrigerators. This includes used electronics which are
destines for reuse, resale, salvage, recycling, or disposal.
• Electronic corporations push a constant need for “newness”
which is a need to always have the latest and newest
devises (phones, TV, gaming system)
DIRECTIONS

• Each group will be given 15 minutes to research one question


assigned to them and come up with at least 3 facts/pieces of
information. The groups will write their facts on a poster sheet
of paper and choose on person to present to the class. Make
sure to include the facts your group come sup with in your
notebook.
• You will turn in your poster paper as a group and have the facts
in your individual notebook.
RESEARCH QUESTIONS

1. What are some of the ways that e-waste damages the


environment?
2. What carcinogens or deadly chemicals are people expose to?
3. Are there specific illnesses that people suffer because of e-
waste?
4. Does one country produce more e-waste than any other
country?
5. What are some ways we can curb e-waste?
6. How many iPhones have been resealed since the first iPhone
and how often are they released?

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