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12/12/2018
 

Corporation

 The corporation is an organizational-legal formation which long enough period can function that forms unlimited opportunities for perspective development. The corporation is the dominating form of enterprise activity. Shareholders who have limited liability at a rate of the payment in the share capital of corporation are considered as its owners. All profit of corporation belongs to its shareholders.

The corporation shares on two parts. One part is distributed among shareholders in the form of the dividends, the second is the profit which is used on a feather investment is unallotted. Functions of the property and the control are divided between shareholders and managers. The main advantage of corporation is that the corporation is the most effective form of the organization of enterprise activity, considering a real opportunity of attraction of necessary investments. Through a securities market it can unite different after the sizes capitals of a plenty of physical and legal persons for financing modern directions of scientific and technical and organizational progress, escalating of industrial potential.

For powerful corporation much easier constantly to increase volumes of manufacture or services. It gives a kind opportunity to receive constantly growing profit. Besides each shareholder as the co-owner of corporation bears only limited liability. Important and that the separate person can reduce own financial risk if will buy actions of several corporations. Creditors can make a complaint only to corporation as to the legal person, instead of separate shareholders as to physical persons.

But the corporate form of the organization of enterprise activity, as well as all others, has corresponding lacks. There are certain disagreements between functions of the property and the control which negatively influences necessary flexibility of operative management of corporation. The corporation pays big taxes counting upon unit of received profit, than other organizational forms of business. There is a problem of the double taxation. In the corporate form of business there is an opportunity of abusing from officials.

The understanding of essence of business is connected also with definition of his role in economy of different levels of system of housekeeping. Business serves as the lever for change of structure of economy. For businessmen the basic incentive motive - an opportunity of reception of profit. They almost always concentrate the actions on development of perspective directions of economic activities, feedback from which can surpass average indices. Development of business creates "nutrient medium" for a competition. Providing development of perspective manufactures, businessmen promote faster updating of технико-technological base and the nomenclature of production of firm. They stimulate economic activity, supporting a competition and the existing market.

It is possible to consider business by the catalyst of economic development and directions of economic activities, feedback from which can surpass average indices. This original accelerator essentially influences structural reorganization in economy; increase in volumes of manufacture and granting of services; stimulation of investment activity; increase of a level of demand and the offer; acceleration of rates of economic development of national economy as a whole. Such phenomenon of free work for reception of own benefit provides an even greater prize for economy as a whole.

Business carries out especial function in economy and a national economy which semantic essence is reduced to updating economic system, creations of the innovative environment which attracts destruction of traditional structures and opening of a way to transformations, finally becomes that force which accelerates movement of economy on a way of efficiency, rationalization, thrift and constant updating. Experience of all without exception industrial the developed countries with market economy of a social direction incontestable is saved up confirms, that business - is necessary a condition of achievement of economic success.

 
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