Question

What are the key features of the corporation and why can it be said that, despite its profit-making nature, it has a public foundation?

Answer 1

Ans- The key features of the corporation are mentioned below:-

1) Limited liability- It has limited liability against debt and lawsuits filed agains the company. The responsibility of the company is with any loans, mortgages or revolving credit with vendors.

2) Owned by shareholders- Shareholders are allowed to vote based on the number of shares they own. The more the share with a person, the more the power would hang with him or more ownership.

3) Double taxation- It means that tax is paid twice on the same source of income. In this income is taxed at both corporate and personal level.

4) Corporation have their own lifespan-The average life span of today's multinational,corporation is 40 to 50 years. If a corporation has perpetual existence, the corporation will continue even if the shareholders, directors, and officers come and go.

5) They have professional management-In a corporate sector , professional management is a key in this sector since it determines the success and failure of the process.

They have a public foundation because in order to attract public goodwill they provide economic benefits to their corporate sponsers.