CORPORATIONS MERGERS MULTINATIONALS

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CORPORATIONSMERGERSMULTINATIONALS
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CORPORATIONS

• MOST COMPLEX BUSINESS ORGANIZATION
• LEGAL ENTITY OWNED BY STOCKHOLDERS
• STOCK CERTIFICATE OF OWNERSHIP
• 20 OF ALL BUSINESSES ARE CORP.
• 90 OF PRODUCTS SOLD IN U.S.

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TYPES OF CORPORATIONS

• 1) CLOSELY HELD CORPORATIONS
• ISSUE STOCK TO ONLY A FEW
• USUALLY FAMILY MEMBERS
• RARELY TRADE STOCK
• PASSED ON
• ALSO KNOWN AS PRIVATELY HELD CORPORATIONS
• 2)PUBLICLY HELD CORPORATION
• STOCK AVAILABLE TO EVERYONE
• SOLD ON THE STOCK MARKET

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CORPORATE STRUCTURE

• OWNERS STOCKHOLDERS
• BOARD OF DIRECTORS ELECTED BY STOCKHOLDERS
• CORPORATE OFFICERS
• MANAGERS
• EMPLOYEES

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ADVANTAGES

• LIMITED LIABILITY FOR OWNERS
• LOSE ONLY INVESTED MONEY
• TRANSFERABLE OWNERSHIP
• SELL STOCK
• ABILITY TO ATTRACT CAPITAL
• BOND CONTRACT TO REPAY BORROWED MONEY
• LONG LIFE

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DISADVANTAGES

• EXPENSIVE DIFFICULT START UP
• CERTIFICATE OF INCORPORATION
• STATE GOVERNMENT LICENSE
• DOUBLE TAXATION
• CORPORATIONS PAY TAX ON PROFIT
• STOCKHOLDERS PAY TAX ON DIVIDENDS
• LOSS OF CONTROL
• PROTECTING JOBS NOT BEST INTEREST
• REGULATIONS
• REPORTS - SEC

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CORPORATE COMBINATIONS

• HORIZONTAL MERGER
• FIRMS COMPETING IN SAME MARKET
• 1998 CHRYSLER DAIMLER BENZ
• VERTICAL MERGER
• FIRMS INVOLVED IN DIFFERENT STAGES OF PRODUCTION
• CONGLOMERATES
• FIRMS TOTALLY UNRELATED

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MULTINATIONAL CORPORATIONS

• LARGE CORPORATIONS SELL PRODUCTS WORLDWIDE
• ADVANTAGES?
• DISADVANTAGES?