Corporation

A corporation is a legal entity which has a separate legal personality from its members. The law classifies a corporation either as a corporation sole (one person) or as a corporation aggregate (any other number). Most corporations are registered with the local jurisdiction as either a stock corporation or a non-stock corporation. Stock corporations sell stock to generate capital. A stock corporation is generally a for-profit corporation. A non-stock corporation does not have stockholders, but may have members who have voting rights in the corporation.

Currently, the modern business corporation is the dominant type of corporation. In addition to its legal personality, the modern business corporation has at least three other legal characteristics: transferable shares, perpetual succession capacity, and limited liability. The existence of a corporation requires a special legal framework and body of law. Corporate statutes typically give corporations the ability to own property, sign binding contracts, pay taxes in a capacity that is separate from that of its shareholders (who are sometimes referred to as “members”).

The legal personality has two economic implications. First it grants creditors priority over the corporate assets upon liquidation. Second, corporate assets cannot be withdrawn by its shareholders, nor can the assets of the firm be taken by personal creditors of its shareholders.

The regulations most favorable to incorporation include limited liability and perpetual lifetime. Unlike in a partnership or sole proprietorship, shareholders of a modern business corporation have “limited” liability for the corporation’s debts and obligations. As a result their potential losses cannot exceed the amount which they contributed to the corporation as dues or paid for shares. Limited liability reduces the amount that a shareholder can lose in a company. This in turn greatly reduces the risk for potential shareholders and increases both the number of willing shareholders and the amount they are likely to invest.

Another favorable regulation, the assets and structure of the corporation exist beyond the lifetime of any of its shareholders, bondholders, or employees. This allows for stability and accumulation of capital, which thus becomes available for investment in projects of a larger size and over a longer term than if the corporate assets remained subject to dissolution and distribution.

There are two broad classes of corporate governance forms in the world. In most of the world, control of the corporation is determined by a board of directors which is technically elected by the shareholders. In practice, with the exception of takeovers, the board members are determined by the previous board. In addition to the influence of shareholders, corporations can be controlled by creditors such as banks.

Following on the success of the corporate model at a national level, many corporations have become transnational or multinational corporations: growing beyond national boundaries to attain sometimes remarkable positions of power and influence in the process of globalizing. In the spread of corporations across multiple continents, the importance of corporate culture has grown as a unifying factor and a counterweight to local national sensibilities and cultural awareness.

Notes:

1. stock corporation – акционерная корпорация

2. voting right – право голоса

3. perpetual succession – непрерывное правопреемство

4. binding contract – юридически обязательный договор

5. corporate assets – активы корпорации

6. takeover – поглощение (покупка одной компанией контрольного пакета акций другой компании)

7. corporation sole – единоличная корпорация

8. stock corporation – акционерная корпорация

9. non-stock – неакционерный

10. aggregate – совокупный, общий

11. lifetime – продолжительность жизни; целая жизнь

I. Прочитайте текст (без словаря).

II. Перепишите и письменно переведите на русский язык следующие предложения. Помните, что объектный и субъектный инфинитивные обороты соответствуют придаточным предложениям.

1. This regulations are said to be more favorable.

2. I don’t consider him to be a potential shareholder.

3. The manager expects capital to become available for investment in projects of a larger size.

4. The easing of activity in the United States, coupled with broadly stable growth in Europe, is expected to result in a somewhat more pronounced deceleration of trade volumes in Latin America as compared with Africa, the Middle East, and Eastern European areas.

5. Successful regional agreements are expected to increase trade between partners relative to those countries’ trade with the rest of the world.

III. Перепишите и письменно переведите на русский язык следующие предложения. Обратите внимание на перевод зависимого и независимого (самостоятельного) причастных оборотов.

1. Other things being equal, the internal activities of the corporation will tend to vary directly as its finances.

2. Corporation being able to sell stock, its members are stockholders.

3. Using a stylized three-country oligopoly model of intraindustry trade, economists reason that while formation of corporations can reduce tariffs in the short run, in the long run it hinders multilateral trade liberalization.

4. Corporations growing, there are more disadvantages than advantages in the process of globalizing.

5. Applying the model with an additional variable to capture overall exports of a transnational corporation, we can assess whether these corporations tend to export proportionately more than would “normally” be the case for a similar national corporation.

IV. Перепишите и письменно переведите на русский язык следующие сложные предложения. Обратите внимание на перевод условных предложений.

1. If board members activities are controlled properly, shareholders income will grow.

2. If they registered by our government as a foreign corporation, they would operate outside their home state.

3. If this businessman had made a wiser investment in a corporation, the shareholders would have received the benefit of limited liability regulations.

4. If the effects on the multilateral round are negligible, it does seem that all players appear to be quickening their efforts to seek new preferential agreements.

5. If existing or proposed policies could be evaluated using objective criteria on their ability to achieve the stated national objectives, countries and stakeholders could assess their efficacy and, if needed, adjust the policies.

V. Прочитайте, перепишите и письменно переведите текст.

VI. Ответьте на вопросы по тексту:

1. What legal entity has a separate legal personality from its members?

2. What are the legal characteristics of the modern business corporation?

3. What regulations are considered to be most favorable to incorporation?

4. How can corporations be controlled?

5. How does the law classify a corporation?

Вариант 2