A corporation is an artificial legal entity created by law to have rights like succession and properties authorized by law. It has stakeholders like management, creditors, shareholders, employees, clients, government and the public. A corporation aims to survive early on, increase profits, offer public services and goods to the mass market. Shareholders, bondholders and directors complete the cast, with shareholders getting dividends, bondholders interest, and directors salaries and incentives. Multinational corporations have investments abroad while transnational corporations are registered and operate in multiple countries simultaneously.
A corporation is an artificial legal entity created by law to have rights like succession and properties authorized by law. It has stakeholders like management, creditors, shareholders, employees, clients, government and the public. A corporation aims to survive early on, increase profits, offer public services and goods to the mass market. Shareholders, bondholders and directors complete the cast, with shareholders getting dividends, bondholders interest, and directors salaries and incentives. Multinational corporations have investments abroad while transnational corporations are registered and operate in multiple countries simultaneously.
A corporation is an artificial legal entity created by law to have rights like succession and properties authorized by law. It has stakeholders like management, creditors, shareholders, employees, clients, government and the public. A corporation aims to survive early on, increase profits, offer public services and goods to the mass market. Shareholders, bondholders and directors complete the cast, with shareholders getting dividends, bondholders interest, and directors salaries and incentives. Multinational corporations have investments abroad while transnational corporations are registered and operate in multiple countries simultaneously.
A corporation is an artificial legal entity created by law to have rights like succession and properties authorized by law. It has stakeholders like management, creditors, shareholders, employees, clients, government and the public. A corporation aims to survive early on, increase profits, offer public services and goods to the mass market. Shareholders, bondholders and directors complete the cast, with shareholders getting dividends, bondholders interest, and directors salaries and incentives. Multinational corporations have investments abroad while transnational corporations are registered and operate in multiple countries simultaneously.
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What is a Corporation?
“A corporation is an artificial being created by operation of law, having
the rights of succession and the powers attributes and properties expressly authorized by law or incident to its existence.” (Corporation Code of the Philippines, Sec. 2) Stakeholders of a Corporation
• Management – the party given the authority to implement the policies as
determined by the Board in directing the course/business activities of the corporation. (SEC, Code of Corporate Governance)
• Creditors – the party who lend to the corporation goods, services or money.
• Shareholders – the people who invest their capital in the corporation.
• Employees – the people who contribute their skills, attributes and ingenuity to the corporation. Stakeholders of a Corporation
• Clients - the buyers of the corporation’s product or services for final
consumption, enjoyment, or for use in the production/creation if another goods.
• Government – the apparent interest of this party are the taxes paid by the corporation.
• Public – the result of the responsible or irresponsible conduct of a corporation
affects the public in many ways. Purposes of Corporation
• Early Stage Survival - the main objective of an entity especially for those which has started is the survival during the early years of existence.
• To Increase Profit - the social responsibility of the business is to increase profit.
• To Offer Vital Services to the Public - corporations offer help in the areas in which the government has a hard time providing.
• To Offer Goods and Services to the Mass Market – meet the needs of the lower income class group by offering affordable goods. Shareholders, Bondholders and Directors
• The other players of the corporation, complete the cast for the corporation to operate
• Shareholders – will be having its claim in the form of dividend
• Bondholders – will be having a claim in the form of interest earned via long term agreement
• Directors – will be having a claim on their salaries, incentives, stock oprions and bonuses Shareholders
• An artificial or natural persons that are legally regarded as owners of the
corporation. • Bestowed with special privileges depending on the class of their stockholding • Rights may include the following: 1. right to vote on matters such as elections of BOD 2. right to propose shareholder resolution 3. right to receive dividends 4. pre-emptive right 5. right to liquidating dividends Bondholders
• A person/entity that is a holder of a currently outstanding bond
• Has complete authority to mange the bond in any way
• Given priority during the process of liquidation
• The bonds are not exposed to fluctuation of interest rates
• Will receive a regular interest payments during the life of the bond Board of Directors
• Collegial body that exercises the corporate powers of all corporations
• Conducts all business and controls/holds all assets of the corporation
• Acts as the governing body of the corporation
• Will be headed by a chairman considered as the most influential person
• Activities are determined by powers, duties and responsibilities delegated to it of
conferred on it by authority Board of Directors
• Duties may include the following:
1. governing the organization by establishing broad policies and objectives 2. selecting, appointing, supporting and reviewing the performance of the chief executive 3. ensuring the availability of adequate financial resources 4. approving annual budgets 5. accounting to the stakeholders the organization’s performance Multinational and Transnational Corporations
• Has investment in other countries, • Registered and operates in more than one but do not have coordinated product country at a time. offerings in each country. • Has its headquarters in one country and • More focused on adapting their operates wholly /partially owned subsidiaries in one/more countries. products to each individual local market. • Have invested in foreign operations, have a central corporate facility but give decision making, R&D and marketing powers to each individual foreign market. Multinational and Transnational Corporations
• Desire for growth, desire to escape the protectionist policies of an importing
country, preventing competition, to reduce cost using cheap labor in developing countries are some of the possible motives of creating MNC and TNC.
• Another concern for TNCs is their ability to use foreign subsidies to minimize tax liability.
