Chapter 5.3 - Corporations

closely held corporations

also called privately held corporations, when stockholders pass on their stock to family members

certificate of incorporation

called a corporate charter, a state license to incorporate

publicly held corporations

has many shareholders who can buy or sell stock on the open market

multinational corporations

the world's largest corporations produce and sell their goods and services in more than one country

horizontal merger

two or more firms compete in the same market with the same good or service join together

vertical merger

two or more mergers involved in different stages of producing the same good or service join together

dividends

when corporations determine their profits, they often choose to pay a share of those profits to stockholders in payments

conglomerate

when three or more businesses merge

stock

a certificate of ownership in a corporation

bond

a formal contract issued by a corporation or entity that includes the promise to repay borrowed money with interest at fixed intervals

corporation

a legal entity, or being, owned by individual stockholders, each of whom has limited liability for the firm's debts

limited liability corporations

businesses have the advantage of limited liability for owners