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Threat of monopoly
Business Firms
A business firm is
an
entity
that
employs
resources,
or
factors
of
production,
to
produce goods and
services to be sold to
consumers,
other
firms,
or
the
government.
The
market
Sometimes
the
Firms
exist
in
guides
and sum
of
what order to economize
coordinates
individuals
can on buying and selling
individuals actions.
produce as a team is everything.
greater than the sum
of what they can
produce alone.
The market guides
individuals from the
production of one
good
into
the
production of another
good.
It
coordinates
individuals
actions
so that suppliers and
demanders
find
mutual
satisfaction
Firms
exist
to
reduce
transaction
costs
at equilibrium.
Sole Proprietorship
It is a form of business organization owned and controlled by a
single individual.
Examples
Local Barbershop
Restaurants
Family Farm
Carpet Cleaning Service
Partnership
It is a form of business organization owned and controlled by two
or more persons. Who bind themselves to contribute money,
property or industry to a
common fund, with the intention of
dividing profits among themselves. (General provisions,
Article
1767).
Advantages of Partnership
The owners may transfer their shares of stock to new owners
without affecting the life of the corporation;
Stockholders cannot be personally liable for any debts of the
corporation;
And a corporation may spread its responsibilities over many
persons hired
by the corporations.
Disadvantages of Partnership
A corporation is difficult to organize since it requires the
permission of the
government to operate.
Cooperative
Failures of Cooperative
Failure of the Board of Directors and members to provide
adequate capital.
Incompetent management;
Lack of proper
cooperatives; and
unde
rstanding
of
the
aims
of
the
Corporation
A legal entity that can conduct business in its own name in the
same way an individual does.
Advantages
The owners of the corporation are not personally liable for
the debts of the corporation;
Continue to exist even if one or more owners die; and
Disadvantages
The profits are taxed twice;
Often subject to problems associated with the separation of
ownership from control.
Examples
at&t
Microsoft
Toyota Motors
Ford Motors
Bond
Share of Stock
Public Corporation
It is created for the purpose connected with the
administration of the
government.
Non-stock Corporation
Their objective is to promote public welfare most of them
are the
religious, social, scientific, civic and political
organizations and societies.
If the business firms obey the golden rules, then there would be
no need for a body of laws that will attempt to keep all rules and
regulations within bounds.